Do material efficiency improvements backfire?: Insights from an index decomposition analysis about the link between...

To keep global heating and other negative consequences of socioeconomic activities within manageable boundaries, industrialized countries must undergo substantial decarbonization, requiring the exploitation of synergies with other environmental endeavors. Improving resource efficiency-that is, reducing the resources required to generate a unit of economic output-is a prominent goal pursued across levels of scale. How does resource efficiency relate to decarbonization? Do economies decrease their emissions as they become more efficient? We examine this relationship for Austria from 2000 to 2015 by conducting an index decomposition analysis at the sectoral level by using consumption-based indicators from the multi-regional input-output model Exiobase. Our analysis shows that for Austria, the currently popular pursuit of material efficiency appears to run the risk of coinciding with higher emissions, suggesting that the opportunities to achieve both decarbonization and dematerialization are limited. The Austrian service sectors could contribute to a reduction of the CO₂ footprint via material efficiency improvements, but strong economic growth foils this possibility coming to fruition. The Austrian economy would do well to either curb demand for goods and services driving global CO₂ emissions or to produce imported goods and services domestically in an environmentally more benign manner.