An Approximation to the Environmental Impact of Economic Growth Using the Material Flow Analysis: Differences between Production and Consumption Methods, Applied to China, United Kingdom and USA (1990–2017)

Abstract

The relationship between economic growth and environmental impact has become a recurrent subject of research in recent years. Currently, results that indicate that the accumulation of economic growth leads to a reduction in environmental impact coexist with others that do not show any evidence in this respect. This paper aims to analyse this relationship using Material Flow Analysis through the two most frequent methods: territorial or production and consumption. For this purpose, data from China, the United Kingdom and the USA from 1990–2017 are used. The results show that the method used influences the conclusions, mainly due to differences in the accounting of physical trade flows. The production method, in which physical trade flows coincide with monetary trade flows, tends to underestimate the material consumption of rich, importing countries, while overestimating that of exporting countries. Policies based on this method have limited capacity to reduce global environmental impacts. The consumption method allows the environmental impact to be allocated to each country in a way that is more in line with its true material requirements.