Decomposition Analysis of Finnish Material Flows: 1960–1996

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Abstract
To the extent that environmental impacts are the consequence of the magnitude of total material input into production in an economy, they can be lessened by reducing the use of materials—by concentrating on what has been called qualitative growth. This article presents a summary of Finnish resource use over the period 1960–1996 as a means of evaluating the trends in material use and providing a basis for assessments of sustainability. It adapts the technique of decomposition analysis developed in the field of energy studies to distinguish the effects of changes in aggregate economic activity (“activity effect”), composition of industrial activity (“structural effect”) and materials intensity of use (“intensity effect”) on a sectoral basis.p According to the analysis presented here, materials consumption in Finland has grown substantially between 1960 and 1996 in the electricity, gas and water supply, pulp and paper production, civil engineering, and mining and quarrying sectors. In the same period, the ratio of GDP/mass of material mobilized has improved by 175 percent. Economic growth has caused the largest increases in materials use in the building of infrastructures; for example roads, waterways, means of supplying electricity, gas, and water, and in the production of paper and paper products. The least growth took place in the transport, basic metals production, and mining and quarrying sectors.