Abstract
The amount of materials used worldwide in production and consumption increased by 56% from 1995 to 2008. Using an index decomposition analysis based on the logarithmic mean Divisia index, we investigate the drivers of material use, both on a global and a country scale. We exploit a panel dataset of 40 countries, accounting for 75% of worldwide material extraction and 88% of GDP. The results show that economic growth and structural change towards material-intensive countries explain most of the growth in global material use.
1995 Extraction
Baseline year
2008 Extraction
End of study period
Total Increase
1995–2008
Panel Coverage
75% of global extraction
01The Material Metabolism
Since the onset of industrialization, the expansion of global output has been inextricably linked to the extraction, processing, and consumption of raw materials. The physical throughput of natural resources constitutes the material basis of the global economy—and its sustainability.
In 1995, the global economy extracted 48 billion metric tons of raw materials to fuel production and consumption. By 2008, this figure had surged to 68.7 billion tons. If unused extraction, such as overburden from mining, is considered, humanity withdrew an additional 41.3 billion tons in 2008 alone.
The China Factor
China's domestic material extraction more than doubled from 7.9 billion tons in 1995 to 18.1 billion tons in 2008. Its share of worldwide material extraction rose from 16.4% to 26.4%—fundamentally altering the global material intensity landscape.
The sheer magnitude of this physical metabolism raises a critical question: Can the global economy create "bigger cakes with fewer ingredients"—or have we merely shifted the kitchen to regions with lower efficiency?
02The LMDI Approach
To disentangle the determinants of material use, we employ the Logarithmic Mean Divisia Index (LMDI)—a perfect decomposition method that leaves no unexplained residual.
The Decomposition Identity
Activity Effect
Economic growth (GDP)
Structural Effect
Sectoral composition shifts
Intensity Effect
Material efficiency gains
We extend this framework to distinguish between within-country and between-country structural change. This allows us to isolate the effect of the global shift in production towards material-intensive developing nations from domestic structural shifts towards services.
03Global Findings
The decomposition reveals that the "bigger cake" of the global economy indeed required significantly more ingredients—contradicting the optimistic hypothesis of autonomous dematerialization.
Decomposition of Global Material Use (1995–2008)
Gross output increased by 58.8%, driving material use proportionally
Shift towards material-intensive emerging economies
Transition from manufacturing to services
Technological progress and efficiency gains
Key Insight: Efficiency gains and domestic structural shifts towards services were insufficient to offset the overwhelming pressure of economic growth and the geographical relocation of material-intensive production.
04A Typology of Material Dynamics
The global aggregate conceals substantial variation. Based on the relationship between economic growth and material use growth, we classify nations into four distinct clusters.
Best Performers
Decoupling achieved through structural transformation and efficiency gains
GDP Growth
High
Material Use
Low/Stable
Industrializing Giants
Massive scale effect overwhelms efficiency improvements
GDP Growth
Very High
Material Use
Very High
Mature Economies
Material saturation with modest growth
GDP Growth
Low/Moderate
Material Use
Low/Stable
Resource Exporters
Declining efficiency due to falling ore grades
GDP Growth
Low
Material Use
High
05The China Effect
China's trajectory is particularly striking. The activity effect was the strongest in the entire sample—without efficiency gains or structural change, Chinese material use would have quintupled from 1995 to 2008.
Mining & Quarrying Share
China's global share (1995–2008)
Basic Metals Share
China's global share (1995–2008)
The rise of China in sectors such as steel production—accounting for 37.7% of worldwide crude steel production in 2008 compared to 4.7% in 1995—drove global demand for metallic minerals. The global "efficiency" of heavy industries effectively declined because production shifted to a region with lower material efficiency.
This confirms that the "Between-Country" structural effect is driven by the relocation of specific material-intensive sectors to China. The "virtual" dematerialization of the West is partly an artifact of offshoring—a phenomenon we term "material leakage".
Implications
The 56% increase in global material use was driven overwhelmingly by economic growth. There is no empirical evidence of global dematerialization.
Decoupling is possible—at the national level through structural transformation and efficiency improvements—as demonstrated by Eastern European transition economies.
Global structural change is a double-edged sword—domestic shifts towards services are offset by the relocation of production to material-intensive emerging economies.
Resource exporters face physical limits—declining ore grades create a "Red Queen" effect where technology must run ever faster just to maintain efficiency.
Reliance on autonomous technological progress or the natural evolution towards service economies will be insufficient to achieve sustainable resource use. Policy interventions must explicitly target the material intensity of production—particularly in the construction and heavy industry sectors of emerging economies where the "China effect" is most pronounced.
Original Paper
Bigger cakes with fewer ingredients? A comparison of material use of the world economy
Ecological Economics, Vol. 109, January 2015, pp. 109-121
Co-Author:
Frank Pothen (ZEW Mannheim)