Kenneth Ruffing

This chapter describes the conceptual basis for developing decoupling indicators, argues for their use in the policy cycle, reports on efforts to construct a large number of such indicators, primarily for Organisation for Economic Co-operation and Development (OECD) countries, and discusses the implications of the results.

Technically, the term decoupling refers to the relative growth rates of a pressure on the environment and of an economically relevant variable to which it is causally linked. For example, at the national level the growth rate of sulfur dioxide emissions may be compared with the growth rate of the gross domestic product (GDP); at a sectoral level, the growth rate of carbon dioxide emissions from energy use may be compared with the growth rate of total primary energy supply.

Decoupling indicators describe the relationship between environmental pressures and the relevant driving forces over the same period. These are also the first two components of the driving force, pressure, state, impact, response (DPSIR) framework widely used in environmental management. Indicators comprising variables belonging to other dimensions of the DPSIR framework (i.e., state, impact, or response) are not described in this chapter but are equally important. From a policy perspective, pressure indicators and the decoupling indicators derived from them are attractive because they are apt to change over shorter time periods than state indicators under the influence of, for example, environmental or economic policy. Reducing the absolute levels of environmental pressures to sustainable levels is the main goal of environmental policy, of

*The author is deputy director, Environment Directorate, Organisation for Economic Cooperation and Development (OECD). The views expressed here are his own and do not necessarily reflect the views of the OECD or its member countries.

course, but decoupling indicators are particularly suitable for monitoring changes over time in response to specific policy measures or to other factors and may be conveniently used as intermediate targets of environmental policy.

It should also be understood that the relationship between economic driving forces and environmental pressures usually is complex. Most driving forces have multiple environmental effects, and most environmental pressures are generated by multiple driving forces, which, in turn, are affected by societal responses. The DPSIR model will not reveal all such linkages, and so there is a need to use decoupling indicators within a more complete analytical framework.

The concept of decoupling is attractive for its simplicity. Graphs displaying a rising GDP juxtaposed with diminishing pollutant emissions or pollutant emissions rising faster than GDP convey a very clear message. However, graphs of synthetic decoupling indicators, such as one variable divided by another, often convey mixed messages. In a growing economy, relative decoupling will imply that environmental pressures are still rising. Likewise, if economic activity is falling, relative or even absolute decoupling may not imply a positive development for society as a whole.

Furthermore, the decoupling concept has no automatic link to the environment's capacity to sustain, absorb, or resist pressures of various kinds (deposition, discharges, or harvests). In the case of renewable natural resources, a meaningful interpretation of the relationship of environmental pressure to economic driving forces will require information about the intensity of use of the resource in question (i.e., of harvesting rate compared with the renewal rate). Some of this context information may be presented through a range of indicators (e.g., water abstraction as a share of available resources, forest harvesting versus annual growth increment). Therefore, decoupling indicators must be used together with targets expressed in absolute terms.

Decoupling indicators can also enrich the set of sustainable development indicators proposed in Chapter 3 of the OECD publication Sustainable Development: Critical Issues (OECD 2001b) because they help link selected environmental resource and outcome indicators with economic variables and indicators (such as GDP or sectoral outputs). Decoupling indicators help reveal prospects for longer-term developments that are essential for progressing toward sustainable development, at both the macro and the sectoral level. Decoupling indicators therefore are a useful tool to complement the extended national balance sheets integrating environmental and economic accounts and the development of underlying frameworks such as material flow accounts.

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