Ecological Economics 32 (2000) 493 – 495
Book review
www.elsevier.com/locate/ecolecon
Growth 7ersus the En7ironment: Is there a Trade -off? Per Ka˚geson, Kluwer Academic, Dortdrecht, Netherlands, 1998, ISBN 0-7923-4926-1, pp. 300
At first I hesitated to review this highly reduc-tionist approach for Journal readers, but on sec-ond thought the book appeared interesting insofar as it is the best on offer with respect to the analysis of time series data to confirm, or deny, the existence of an environmental Kuznets curve — never mind that Kuznets was concerned with income growth and equitable distribution of newly generated wealth. Thus, while not a sophis-ticated econometric analysis [for this, seeEcologi -cal Economics25 (1998)], it provides nonetheless a substantial set of macro data on rates of change in resource intensity use and emission levels nor-malized to growth in GDP. Albeit restricted to OECD countries for the years 1960 – 95, and thus may be seen as demonstration of the behaviour of key parameters on the downward slope of the pollution curve, or more appropriately, the clean-up curve. The book is made clean-up of two distinct studies. One concerning resource use per unit of output, confirming a sort of dematerialization of the economy, and the other examines the trend in pollution loads, confirming a very qualified delinkage of growth and environmental quality.
The table on page 270 provides a summary assessment on degrees of delinkage. The data is organized in accordance to four levels of delink-ing, namely: (i) relative delinking (R) where the curve is upward sloping but at a rate Beconomic growth; (ii) absolute delinking but slow (AS) where the curve is downward sloping and will reach ‘sustainability’ in \20 years, 1990 being
the base year; (iii) absolute delinking but fast (AF) where the result of (ii) is reached in B20 years; and (iv) sustainable growth (S). The latter is a target where new wealth creation will remain within the limits of ‘sustainable growth’. Notable in this assessment is that only biochemical oxygen demand (BOD) loading and the use of mercury fall currently into the S category. The prognosis is not bright for emissions of greenhouse gas, nitro-gen in water tables of agricultural regions, waste generation leading to NIMBY conflicts for the location of landfill sites, and surprisingly, noise. All of these problems fall in the R category. However, the AF category includes such pollu-tants and contaminants as volatile organic com-pounds (VOCs), lead, carbon monoxide, chlorofluorocarbons (CFCs), BOD, toxic metals, and persistent organic pollutants (POPs). That the latter should fall into the AF category is incom-prehensible considering that the observed data on sharply declining trends is a dependent variable of the regulatory system itself. That is the relatively small number of POPs which are identified and subsequently banned or sunsetted. One cannot escape the fact that there are literally thousands of new chemicals, in particular the family of organochlorines, which have entered the produc-tion stream in recent years that are potentially hazardous but untested. However, the burden of proof is left to the regulatory system, which must undertake the costly time-consuming test, com-pound by comcom-pound. This situation is alarming when investigators find that many of these envi-ronmentally pervasive compounds act as en-docrine inhibitors, carcinogens and effect development and reproductive capacities in
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mans and wildlife populations alike (Colburn et al., 1996). Clearly, good ethics require that the ‘burden of proof’ verifying that these compounds do no harm to the environment must fall on those who profit and not those who become the (unfor-tunate) victim.
This raises a larger question on whether it is legitimate to assess direction of trends based solely on (officially) prescribed targets (and sub-sumed risk analysis) or whether assessment crite-ria should stem from an independent source, legitimized, of course, at the epistemological level with all its various degrees of uncertainty (Fun-towicz and Ravetz, 1991). A most telling indicator of the existence of a downward sloping Kuznets curve is, in this assessment, left as an open ques-tion mark, i.e. nature/biodiversity. While the au-thor recognized the criticality function of a healthy ecosystem, he nonetheless claimed that it is impossible to rate this factor, in part, because of poor data and, in part, because the question is so complex that it appears futile to sort out the growth factor from all the others, of which he identified population density and the subsequent competition with other species for scarce habitat. While some of these complex factors may be unrelated to growth in income, it has been shown that economic growth is strongly correlated to change in land use, of which one of the most critical factors is the level of automobile owner-ship. The incapacity to employ a complex ecolog-ical indicator for the assessment of ‘delinking’, in my view, is not for the lack of data, which is true, but the single factor approach in the analysis. Ecological indicators are holistic in context of whole systems and in their particulars with respect to multi-factor analysis of a many-to-one and a one-to-many stress-response relationship (Friend and Rapport, 1991).
The assessment is so construed as to make inputs (resource use) and outputs (environmental externalities) appear as unrelated trajectories, rather than an amalgamated material-energy bal-ance matrix adding-up, ultimately, to a Gross Domestic Waste Product (GDWP). The tangible products of GDP (i.e. primary, secondary and tertiary sector inputs/outputs+household con-sumption+imports−exports) must equal
GDWP. The reductionist approach, where each commodity (resource-pollutant) is separately ex-amined, makes for an unsatisfactory analysis for those of us who suspect that the whole sum of its parts. The author, while familiar with EE, at least with the writing of Herman Daly, deeply confuses some of its fundamental concepts and principles. For instance he equates a steady-state system (a thermodynamic concept) with ‘stagna-tion’ (a non-growing GDP), p. 277. Nor are tau-tologies critically examined in a study which link (official) environmental data with concepts and definitions embedded in economic statistics and the conventions of the SNA. Standards for emis-sion levels set per unit output is but one typical example. However, more critical is that a measure GDP in advanced industrial countries has a built-in dematerialization function built-insofar that ‘new growth’ is almost exclusive to the tertiary sector, the primary and secondary declining relatively and, in some cases, absolutely. Thus, it is the non-tangible ‘product’ that accounts for the up-ward sloping GDP curve. While productivity, Daly’s ‘throughput’, is a clearly defined concept for a ‘tangible’ production function, it is a highly ambiguous concept in a measure of service out-puts. Where is the dematerialization of an econ-omy that airlifts, at a profit, cut flowers in the depth of winter from Nairobi to Amsterdam? One may well ask to what extent is the apparent downward slope of the environmental Kuzets curve an artifact in the design of the SNA. Thus, the not surprising results of the study is a series of downward sloping environmental indicators on a GDP baseline. This data can be shown to move in the same direction if some other arbitrary baseline is used, for example technological change, human taste and lifestyle, and policy actions — none of which have a necessary connection to economic growth per se, but may by the same token be auto-correlated.
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growth; and (iii) the changing condition of the ‘technosphere’ makes it difficult, if not impossible, to predict future trends. The thesis appears to confirm the ‘received wisdom’ of policy-makers and presumably the World Bank. The big qualifi-cation is that the evidence is drawn from OECD Europe, North America and Japan, and may not hold for the whole globe. The thesis is kicked off by lining up the protagonists for and against economic growth. Wheeled out is the familiar cast and carefully selected quotations from Mishan, Meadows, Commoner, Ehrlich, Daly et al. versus Barnett and Morse, Simon, Beckerman et al. While this makes for a good plot, it is not scien-tific. For instance the doomsayer and the Panglos-sian construct theories (and make predictions) from different axiomatic base drawing out an apparent paradox of contraction based on identi-cal data. Prognosis is either correct, incorrect, or if one is a bit cautious, undecidable, depending on the model employed. The chapter ‘Delimitation and Methodology’ gives the impression that the study is ‘delimited’ not by choice of theory but by availability of data. Subsumed is that ‘environ-mental damage’ is directly proportional to (a) material-energy consumption per unit of output and (b) levels of emission load of a set of well-defined pollutants.
Discussion on valuation confuses a value of a given resource stock (presumably owned by some-one) where the objective is to maximize a life-cy-cle income stream (neoclassical analysis) with a conservation value of natural capital (EE analy-sis) aimed at optimizing a community and ecosys-tem ‘well-being’ function, Chapter 3, pp. 21 – 24. The author cannot be faulted for a confusion that runs deep in the neoclassical literature on valua-tion from which he quotes, not always correctly, however, like the distinction between net-rent and user-cost methods. The study ultimately avoids the quagmire of valuation by resorting to a com-parative rate of change method normalized to GDP. Chapter 4 is a brief review of an equally confusing conceptual world of sustainability.
While the study recognized the existence of limit functions, by assuming national boundaries it failed to come to grips with the ontological difficulty of sustainability arising from the ther-modynamic boundary conditions of global eco-logical-economic systems. Witness the maneuvering in establishing greenhouse gas stan-dards in the Kobe protocols and the almost un-real expectations in implementing Agenda 21. Chapter 5 reviews post-war trends in economic growth, productivity, and changing structures of economies in EU 12, the USA and Japan. What is interesting to note is the convergence of (declin-ing) rates of growth in the OECD countries. A convergence usually attributed to the increasing interlocking factors (not only trade) of the global economy and the growing importance of the ser-vice sector in the National Accounts.
The analytical content of the book, Chapters 6 – 19, has been discussed above. Just one word to the Kluwer Press. They need to put more empha-sis on editing of content, grammar and spelling. What is one to make of environmental dept! environmental chock! and environmental ex-pences! A list of acronyms and an index would also be nice.
References
Colburn, T., Dumanoski, D., Peterson Myers, J., 1996. Our Stolen Future: Are we Threatening Our Fertility, Intelli-gence, and Survival? Little Brown, Boston.
Friend, A.M., Rapport, D.J., 1991. The evolution of environ-mental information systems for sustainable development. Ecol. Econ. 3, 59 – 76.
Funtowicz, S.O., Ravetz, J.R., 1991. Uncertainty and Quality in Science Policy. Kluwer Academic, Dordrecht.
Anthony M. Friend Uni6ersity of British Columbia, School of Regional and Community Planning,
