Environmental variables in a decoupling indicator are usually expressed in physical units, and the economic variable (generally a socioeconomic driving force) is expressed either in monetary units at constant base year prices or in physical volumes. However, the notion of a driving force suggests that relevant variables may sometimes include others, such as population growth.1
Decoupling indicators are often expressed in terms of changes over time. Decoupling occurs when the growth rate of the environmentally relevant variable is less than that of its economic driving force (e.g., GDP)2 over a given period. In most cases, however, absolute changes in environmental pressures are of fundamental concern, hence the importance of distinguishing between absolute and relative decoupling. If GDP displays positive growth, absolute decoupling is said to occur when the growth rate of the environmentally relevant variable is zero or negative (i.e., pressure on the environment is either stable or falling). Relative decoupling is said to occur when the growth rate of the environmental pressure variable is positive but less than the growth rate of GDP.3
The choice of decoupling indicator depends on the problem to be elucidated. Here, the term decoupling indicator is used to describe an indicator in which the particular environmental pressure appears as the numerator, and the driving force of interest appears as the denominator. Often, the numerator and the denominator are several steps removed from each other in the cause—effect chain of events. In some cases, it may be possible to decompose the main or primary indicator into two or more intermediate indicators, as follows:
Primary Intermediate Intermediate
= XX Intermediate indicator n.
indicator indicator 1 indicator 2
For instance, in the case of emissions of air pollutants by the energy sector per unit of GDP, the following relationship can be written:
= Emissions/TPES X Depends on emission factors and fuel mix (TPES = total primary energy supply)
TPES/TFC X Depends on conversion efficiency and fuel mix (TFC = total final consumption of energy)
TFC/GDP Depends on end use energy intensities, fuel mix, activity, and structure of the economy
In other words, the decomposition of the relationship between emissions from the energy sector and economic growth allows us to distinguish between the effects of scale (or volume), sector composition, and technology. Each of these factors may in turn be influenced by policies and may be further decomposed (e.g., by fuel or by end use sector) (Figure 13.1).
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