Ecological Economics 33 2000 205 – 218
ANALYSIS
An empirical analysis of dematerialisation: Application to metal policies in The Netherlands
Rob B. Dellink
a,b,
, Patricia P.A.A.H. Kandelaars
c,d
a
En6ironmental Economics, Wageningen Uni6ersity, Hollandseweg
1
,
6706
KN Wageningen, Netherlands
b
Institute for En6ironmental Studies, Vrije Uni6ersiteit, Amsterdam, Netherlands
c
De6elopment Economics, Wageningen Uni6ersity, Hollandseweg
1
,
6706
KN Wageningen, Netherlands
d
Spatial Economics, Vrije Uni6ersiteit, Amsterdam, Netherlands Received 16 December 1998; received in revised form 12 October 1999; accepted 13 October 1999
Abstract
This paper presents a first empirical step in filling the gap between physical and economic models, by combining a material flow model and an applied general equilibrium AGE model. The goal of this paper is threefold. Firstly,
a new methodology is discussed for the integration of material and economic flow models. Secondly, the new methodology is tested for its empirical applicability by simulation of material policies. Finally, the analysis leads to
the identification of major steps for filling the existing gap between physical and economic models further. Fiscal material policies are imposed to reduce the use of specific materials. The material levy and the accompanying labour
tax reduction shift the tax burden from labour to the use of materials. The empirical illustration shows that the physical and economic flows can be made mutually compatible, and that the combined model can be used for
empirical analysis of material policies. From this analysis of material policies in an economic model it may be concluded that the combination of an AGE model and a material flow model may produce an appropriate tool for
analysing environmental, sectoral and distributional effects of dematerialisation policies. © 2000 Elsevier Science B.V. All rights reserved.
Keywords
:
Material use; ‘Green’ taxation; Material flow analysis; Applied general equilibrium AGE www.elsevier.comlocateecolecon
1. Introduction
The extraction, production and waste treatment of materials cause problems that may call for
government intervention. Several countries have imposed materials-related policies, mainly charges
Corresponding author. Tel.: + 31-317-483870; fax: + 31- 317-484933.
E-mail address
:
rob.dellinkalg.shhk.wau.nl R.B. Dellink 0921-800900 - see front matter © 2000 Elsevier Science B.V. All rights reserved.
PII: S 0 9 2 1 - 8 0 0 9 9 9 0 0 1 3 8 - X
and deposit-refund systems on specific materials and products OECD, 1994. In the Netherlands
regulatory policies on the use of materials and products are not yet widespread, mainly because
governmental policies focus on the self-regulatory capacity of the industry, based on covenants.
Flows of materials through the economy are mainly studied from a physical or environmental
point of view, using, for example, material flow analysis and life cycle assessment. These methods
generally do not take into account economic, behavioural or policy aspects. On the other hand,
most economic models do not consider material aspects explicitly.
In the late 1960s and beginning of the 1970s, various analytical studies addressed material flows
in economic models Ayres and Kneese, 1969; Kneese et al., 1970. More recently the interac-
tions between economy, material flows and the material balance principle have been studied theo-
retically Perrings, 1986; Van den Bergh and Ni- jkamp, 1994; Van den Bergh, 1999.
This study tries to set a first, empirical step in filling the gap between physical and economic
models by combining a material flow model and an applied general equilibrium AGE model. The
goal of this paper is threefold. First, a new methodology is discussed for the integration of
material flow and economic models. In the cur- rent paper, the fact that the integration of both
models is not yet perfect is accepted beforehand. Still, the new methodology is already useful for
policy analysis. The second goal is that the new methodology must be empirically applicable. The
third and final goal of the current research is that the analysis should lead to the identification of
major steps that can fill the gap between physical and economic models even further. The overall
aim is to provide a more appropriate tool to empirically assess the economy-wide and environ-
mental effects of environmental policies. This new tool should obey the material balance principle.
1
The material flow model describes the physical flows of materials through the various sectors of
an economy, so that a material balance is satisfied for each material in each sector in the model. To
change the use of materials a material policy may be imposed on specific materials in certain sectors.
With a disaggregated AGE model, the sectoral and distributional effects of policies can be
analysed for various production sectors and household groups. Moreover, the effects of vari-
ous policies on trade and employment may be examined.
In this study, a highly disaggregated empirical AGE model for the Netherlands is used. The
AGE model is a model in monetary terms, while the material flow model is in physical terms. Con-
sequently, the two models have to be made com- patible before they are combined.
Several market-oriented scenarios are de- signed to study the effects of a material policy on
metals, in particular zinc and lead. These metals have been selected because of the environmental
and health risks they may create Gorter, 1994; Annema et al., 1995. The physical data are used
together with the monetary flows to calculate the height of the levies that are imposed on the vari-
ous sectors in the AGE model for the Nether- lands. Thus, the material flow model is used to
determine policies in the AGE model. There is no endogenous feedback from the AGE model into
the material flow model: the results of the AGE model are exogenously combined with the mate-
rial flow model in order to provide the effects of the policy on the use of materials. This does not
mean that all material flows remain constant, but it does imply that all direct material intensities of
the production sectors are constant.
The organisation of this paper is as follows. Section 2 gives a short description of the AGE
model, the material flow model and the way the latter is used in the AGE model. Section 3 dis-
cusses various material and product policies that will be studied in the scenarios. Results of the
scenario analysis are given in Section 4. The last section draws conclusions and presents sugges-
tions for further research.
1
The material balance principle states that materials can be transformed or transported within a closed system, but they
cannot be made or destroyed. This principle is also called the ‘law of conservation of matter’.
Fig. 1. Schematic working of the AGE model.
2. Description of the combination of the models
