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Material implication of Chile’s economic growth: combining material flow accounting (MFA) and structural decomposition analysis

Muñoz, P. and Hubacek, K. (2007) Material implication of Chile’s economic growth: combining material flow accounting (MFA) and structural decomposition analysis. Ecological Economics, 65 (1). pp. 136-144. ISSN 0921-8009

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Abstract

Over the last three decades, the economic integration of the Chilean economy into global markets has been taking place at a rapid pace. For example, in 1986, exports represented 29% of GDP while in 1996 they had increased to 38% of GDP. This period of time was characterized by strong economic growth with an average annual growth rate of about 10%. From a physical perspective, material requirements more than doubled from 220 to 500 million tons of direct material inputs (DMI) during the same decade (the rate of material growth requirements was around 13% per year).

The main objective of this study is to explain the changes in DMI by using a structural decomposition analysis (SDA). The changes in material flow accounting (MFA) were broken down into the effects caused by changes in resource use per unit of output (material intensity effect), changes between and within sectors (structural change effect), changes in the composition of final demand (mix effect), changes due to shifting shares of domestic final demand and export categories (category effect) and finally changes in the overall level of economic activities (level effects). The results, as a percentage of the total level of DMI used in 1986, indicate that economic growth was the major source of material changes (109%). The material intensity and category effects explained 31% and 14% of the increase, respectively. The increase in the material intensity is mainly due to a declining quality of ores in copper production. However, these components were partly compensated by the structure (− 14%) and mix (− 13%) effects. Therefore, for a Southern American country such as Chile, the main causes of these changes in material consumption have been a combination of the nature of economic growth along with an increase in export production and material intensity of production.

Item Type: Article
Copyright, Publisher and Additional Information: © 2007 Elsevier B.V. This is an author produced version of a paper published in Ecological Economics. Uploaded in accordance with the publisher's self archiving policy.
Institution: The University of Leeds
Academic Units: The University of Leeds > Faculty of Environment (Leeds) > School of Earth and Environment (Leeds) > Sustainability Research Institute (Leeds)
Depositing User: Sherpa Assistant
Date Deposited: 30 Oct 2008 14:50
Last Modified: 08 Feb 2013 17:05
Published Version: http://dx.doi.org/10.1016/j.ecolecon.2007.06.010
Status: Published
Publisher: Elsevier B.V.
Identification Number: 10.1016/j.ecolecon.2007.06.010
URI: http://eprints.whiterose.ac.uk/id/eprint/4806

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