History and Existing

Many of the variables that figure in decoupling indicators also appear in the concepts of resource efficiency, resource intensity, and resource productivity. These synthetic measures may be calculated as ratios of averages, marginal quantities, or rates of change (to yield elasticities). For example, resource efficiency and resource intensity are calculated as ratios of resource use to economic value added, and resource productivity is the inverse ratio. Decoupling is usually conceived as an elasticity focusing on changes in volumes, whereas efficiency and intensity are more concerned with the actual values of these ratios. Which usage is chosen depends on the context and, often, on the audience being addressed. These terms appear to draw on the vocabulary of economics and business but do not always have the same meaning. For example, resource productivity is expressed in agricultural economics as the yield per hectare. As a marginal concept— the ratio of the addition to total value added to an additional unit of an input to pro-duction—this is simply marginal productivity and is widely used. The term efficiency is used quite differently. In economics, the term is used most often to refer to allocative efficiency, in which resources are deployed in such a way that the value added per unit of resource use is the same in all sectors. This type of efficiency (if adjusted to take into account environmental externalities) is a necessary but not sufficient condition for achieving environmentally sound use of natural resources—which also entails respecting the environmental sustainability criteria as defined in the OECD Environmental Strategy (OECD 2001a)—at the lowest economic cost to society. In the business community, a term widely promoted by the World Business Council on Sustainable Development is eco-efficiency, which refers to adding value while reducing the intensity of resource use, or achieving the improvements in resource efficiency that are also commercially profitable.

A recent report prepared for the Swedish Environmental Advisory Council (Azar et al. 2002) presented and analyzed various decoupling trends (CO2, energy, transportation, materials, chemicals, biomass, SO2, NOx, chromium, copper, waste) in Sweden, the European Union, Japan, the United States, Brazil, China, and India over the past 10-40 years, using an approach similar to the one discussed here. In the report they conveniently cite a selected number of papers from the literature on concepts related to decoupling since 1966.

They conclude that a general decoupling of materials and energy from economic development is less interesting than decoupling of specific environmental impacts that cause concern (e.g., emissions of metals and persistent chemicals foreign to nature, CO2, and acidifying substances) and that reducing the absolute levels of these emissions should be the main focus of policy.

A recent report by the OECD (2002), on which this chapter is largely based, develops and analyzes a set of thirty-one decoupling indicators covering a broad spectrum of environmental issues. Sixteen indicators relate to the decoupling of environmental pressures from total economic activity under the headings climate change, air pollution, water quality, waste disposal, material use, and natural resources. The remaining fifteen indicators focus on production and use in four specific sectors: energy, transport, agriculture, and manufacturing.

The evidence presented in the report shows that relative decoupling is widespread in OECD member countries. Absolute decoupling is also quite common, but for some environmental pressures little decoupling is occurring. The evidence also suggests that further decoupling is possible because absolute decoupling was recorded in at least one OECD country for all but two of the decoupling indicators examined at the national level.

The OECD Environmental Policy Committee uses these or similar decoupling indicators in its environmental performance reviews. Closely related indicators are also used in the sustainable development chapters of the economic reviews undertaken by the OECD Economic and Development Review Committee.

Although each of the indicator sets currently used by various international organizations was developed for a different purpose or from a different perspective, they are all based on the long-established data collection efforts of the OECD, International Energy Agency, United Nations, or Food and Agriculture Organization. Most of these indicators are also based on a common set of selection criteria for environmental indicators, such as those published by the OECD in 1993 (Table 13.1). These criteria are

Table 13.1. OECD environmental indicator selection criteria.

Policy relevance An environmental indicator should and utility for users • Provide a representative picture of environmental condi tions, pressures on the environment, or society's responses

• Be simple, easy to interpret, and able to show trends over time

• Be responsive to changes in the environment and related human activities

• Provide a basis for international comparisons

• Be either national in scope or applicable to regional environmental issues of national significance

• Have a threshold or reference value against which to compare it so that users can assess the significance of the values associated with it

Analytical soundness An environmental indicator should

• Be theoretically well founded in technical and scientific terms

• Be based on international standards and international consensus about its validity

•Lend itself to being linked to economic models, forecasting, and information systems

Measurability The data needed to support the indicator should be

• Readily available or made available at a reasonable cost

• Adequately documented and of known quality

• Updated at regular intervals in accordance with reliable procedures

Note: These criteria describe the ideal indicator; not all of them will be met in practice.

also valid for decoupling indicators. In view of the difficulty of obtaining agreement on indicators, it is encouraging that many variables in the set of decoupling indicators found in the OECD report also show up in other indicator sets.

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