Revised 1 March 2025


There are claims that technological progress and structural change will enable a decoupling of production and consumption from adverse impacts on the environmental and accordingly promote “green” growth as being possible (World Bank 2012). 



Figure 1: Claimed Decoupling of Natural Resources from Economic Activity (World Bank 2012)



Figure 2 below shows annual changes in world energy and GDP. The correlation coefficient is a high 0.83. 


Figure 2: Annual Changes in World Energy and GDP (Keen 2021)


This high correlation is as expected because any form of economic activity, both good and bad, requires the use of both energy and materials. The energy intensity of many products and services can be reduced and their use of energy can also be reduced, but there are physical and thermodynamic limits to what can be achieved (Jackson, 2009). Absolute decoupling of an economic system from the use of energy and materials is a physical impossibility. 


Relative decoupling of GDP from energy and materials is possible, but there are also limits as to how much is possible. For example, it is possible to use less energy and materials more efficiently to provide goods and services. Recycling helps to reduce the use of additional materials. But there are thermodynamic upper limits to the possible efficiencies of both energy use and recycling. With improved technology, we have already closely approached many of these upper limits. Photovoltaic panels and wind turbines are good examples. Use of materials to produce goods and services will always require the use of energy to mine, process and recycle and there are thermodynamic limits as to the level of efficiencies that can be achieved by any process. 


Claims of relative decoupling in some countries have been largely due to not taking into account the embodied energy of imported goods. Many countries have shifted their factories to China where factory production emits greenhouse gases to the atmosphere. The products are then exported from China to other countries for consumption. Reductions in both domestic and imported consumption within each country are necessary to mitigate the impact of climate change. In 2019, Timothee Parrique debunked the extent that decoupling has taken place in some countries in a comprehensive 872-page publication. Figure 3 below shows an example of the extent that emissions of consumption within a country is based on both domestic and imported generation of emissions. 



Figure 3: Percentage of GHG emissions in the UK associated with different groups (Barrett et al., 2011)


Regardless of the extent that relative decoupling is possible, relative decoupling will not necessarily result in a decline in the production and consumption of materials and fossil fuels. The Jevons paradox or rebound effect occurs when greater efficiency in the use of resources results in greater consumption of that resource due to an increasing demand (Jevons, 1865). Jevons’ example is the increase in the efficiency of the steam engine in the 1800s which resulted in a greater demand for more steam engines. Although each new improved steam engine used less coal, the combination of more steam engines using less coal resulted in a greater consumption of coal. The rebound effect can take place when demand is unrestricted, such as in a growth economy.


The rebound effect puts a brake on modern day reductions in the consumption of resources due to improvements in efficiencies. For example, if the efficiency of a car engine is improved and uses less fuel per kilometre, then an owner is able to drive longer distances within the same budget or use the savings in fossil fuels to purchase additional goods and services, The potential to reduce consumption of fossil fuels is not necessarily fully realised because any purchase of additional goods and services always involves consumption of additional materials and energy. 


Another example of the rebound effect is the replacing of electrical bar heating of homes with a heat pump. Owners often choose to adopt a higher standard of comfort within their previous budget for heating by heating their entire home instead of only the room they occupy and raising the temperature of the rooms to a level where they can comfortably remove top layers of insulating clothing. The potential savings in energy are not necessarily fully realised even though the efficiency of a heat pump to provide home heating is much greater than that of bar heaters.