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DEMATERIALIZATION AND WHAT IT MEANS FOR THE ECONOMY—AND CLIMATE CHANGE

An interview with Andrew McAfee by Curt Nickisch

The industrial era brought an unbelievable rise in human prosperity. As economies grew and standards of living climbed ever higher, forests were cleared, soil was stripped, and oceans were emptied. When the United States celebrated the first Earth Day back in 1970, people were afraid the world would soon run out of food and other resources, burning it up like flash paper, gone forever. But that seemingly unstoppable tide could be turning.

Andrew McAfee, codirector of the MIT Initiative on the Digital Economy and author of the book More from Less: The Surprising Story of How We Learned to Prosper Using Fewer Resources—and What Happens Next, has been studying a surprising new trend of dematerialization. Thanks to new technologies and digitization, some national economies are managing to grow at the same time they use less material. This counterintuitive trend is not happening fast enough to stop the likes of climate change, but it offers some hope: that future economic prosperity may not damage the environment as badly as before.

Can you please explain what’s happening? How can advanced economies grow but use fewer materials overall? What’s going on?

ANDY McAFEE: It’s deeply counterintuitive. I didn’t believe it the first time I heard about it. I had walked around with this unexamined assumption that as economies grow—and as populations grow—they use more materials from the earth. They use more resources. You need molecules to build an economy.

I came across this wonderful essay written by Jesse Ausubel called “The Return of Nature: How Technology Liberates the Environment.” He made this point, and I thought, “That would be wonderful if it were true, but that can’t possibly be right. That’s not how growth works.” So I went to his sources. I double-checked, and I came to the conclusion he was absolutely right.

I became extremely enthusiastic about this and wanted to understand it and try to explain it, because this is a really profound change in our relationship with the planet that we all live on. We had 200, almost 250 years of the industrial era, which was a period of amazing growth, human population, human prosperity, and economies. But, wow, the industrial era was really tough on our planet. We took more from the earth year after year. We dug mines. We chopped down forests. We polluted. We killed all of the passenger pigeons. We almost killed all the buffalo and whales.

In some ways, this was a tough chapter for the planet Earth, and it looked like there was this trade-off between our prosperity and the health of the planet. I don’t believe that trade-off has to exist anymore because we’re demonstrating that we can grow economies, increase the population, grow prosperity, and improve the human condition while also taking better care of the earth and treading more lightly on it.

Which is a profound idea because we all understand that business and its quest for efficiency and being more productive is on a path to using things better and more efficiently. But it still seems like it’s always a plus one or a plus 0.75 endeavor, where you’re creating a new product to sell. You may be using things more efficiently, but you’re still creating a new product, and people are throwing out their old ones. But you’re saying this is actually turning to the point where we’re using less material. We’re actually reversing the trend and using less iron, for instance.

Less nickel. Less gold. Less fertilizer. Less water for irrigation and less timber. Less paper. Less of just about all of the molecules. All the things that you build an economy out of.

There’s an important distinction here. There are two kinds of less. There’s less per capita—in other words, less timber per American. And then there’s less timber year after year, by all Americans put together, which is a much more profound phenomenon. That’s essentially saying that all Americans’ total footprint on the planet is shrinking over time. That’s what is going on and that’s what I wrote More from Less about.

You’ve actually made predictions about where America’s consumption of certain materials is going to be in the next decade.

Well, you could think that this absolute dematerialization is happening. It’s pretty clear in the evidence. But maybe it’s just a temporary lull before our voracious appetites kick in again and cause us to dig more mines, chop down more forests, do all these things, and take more from the earth. I don’t think that’s what’s happening, and I don’t think that’s what’s going to happen. I think the downward trend in a lot of materials is going to continue, and we’ve already seen some plateaus. For example, total American energy use in 2018 was only a tick—about a quarter of a percent—bigger than it was in 2007. The economy’s a lot bigger than it was in 2007, yet our energy use has flatlined.

What I think is going to happen is that that total energy use is actually going to start going down, just like we saw with lots of other resources. The main reason I believe that is extremely simple. You highlighted businesses and their relentless quest for growth and profit. That’s absolutely true. That’s at the heart of the capitalist system.

We need to keep in mind businesses’ quest for higher profits is always a simultaneous quest for lower costs. A penny saved is a penny earned. Materials cost money. What I think is going on is that in this era of amazing technologies, you have the computer, the network, the hardware, and the software. In this era of amazing technologies, we have this widespread opportunity to swap out atoms for bits. And because you don’t pay typically for each additional bit, companies are taking technology up on that offer over and over and over, in big ways and small ways, and that adds up.

Let’s dig into a couple of examples just so that we can really picture what’s happening. Let’s talk about timber. Why is the United States now using less timber than it used to?

Well, think about the things that we use timber for. We used to use timber in the 19th century for all kinds of things, including building ships and ships’ masts. Now, we pretty clearly don’t do that anymore. A lot less appreciated, we use immense amounts of timber to build railroads all across the country. Railroad ties were made out of wood for a long time, soaked in creosote. We don’t do that anymore. We make them out of concrete.

So, because of that substitution effect, and because we just don’t make ships out of wood anymore, our total use of timber is at least 20%, maybe 30%, lower than it was in 1990, which was the year of peak timber in the United States.

Simultaneously, the year of peak paper in the United States was 1990. Right now we’re about 40% below the level of paper that we used in 1990. The answer there is even easier for me to see. When was the last time you printed out maps to get from point A to point B? You don’t print out memos or documents nearly as much anymore because we look at screens and because we have GPS systems on our smartphones. So, you could look at the paper generated earlier in the computer age—all that 11 × 17-inch fanfold paper, all the stuff we used to print out—and think that the computer age would be bad for total paper use and for cutting down trees. That’s not true at all. It’s really good. It’s finally letting us get past peak paper.

An even crazier thing that I came across when I was researching the book was that our total use of cardboard is basically about as big as it was in 1995. I found that extremely hard to believe because of all the Amazon packages that show up outside my door almost every day. But again, that’s the very visible phenomenon. The much less visible phenomenon is the fact that Jeff Bezos realizes that I get zero value from that cardboard, so he and his colleagues are working to reduce the total amount of packaging material that you need to get something to my front door.

So, there are all these efficiencies happening back farther in the supply chain and lots of innovation to make cardboard boxes lighter, less materials intensive, again, because this stuff costs money. It’s hard to believe, but all of those savings add up, and they bring us to a point where our aggregate cardboard use is where it was almost 25 years ago. It’s a crazy phenomenon.

Are we hitting peak paper in other countries, and are we hitting peak paper and peak timber in developing nations that aren’t in a position to muster the power of these technologies?

I came across this research that said humanity as a whole, globally, probably hit peak paper in about 2013. So, total human use of paper is finally going down. For the other materials that you build an economy out of, I don’t think that’s the case. However, I can’t say that with 100% confidence because the data gets spotty and much, much lower quality when you move from the United States to the entire world.

Globally, I don’t think humanity is at peak stuff yet because there are too many low-income countries that are rapidly growing and becoming more prosperous, and you have to build an economy. You have to urbanize and build infrastructure. That’s a materials-intensive process.

But one of the wild things I learned writing this book was that if you look at satellite imagery about urbanization (as opposed to relying on countries to give you a list of their cities and how many people live in them, which can be really inconsistent), we are an urbanized species as humans. And the great majority of us already live in an urban environment.

We’ve built up a lot of the physical infrastructure that we’re going to need. We’ll need more. Nigeria is clearly going to need a lot more stuff because its population is going to grow so much in the decades ahead. But Nigeria is also not going to lay a copper telephone network like the currently rich world did in order to have telecommunications infrastructure. And I’m pretty sure Nigerians are not going to buy as many cars per capita as Americans did as they were becoming prosperous; they’re not going to build as many coal plants because technology has evolved. So, I’m not saying we’re globally at peak stuff, but I am saying we might be surprised at how quickly we get there because the countries that are becoming more prosperous today are going to follow very different technology and materials paths than the United States and other currently rich countries did.

This dematerialization trend of moving away from peak is also happening in agriculture. Do you think the U.S., for example, is going to farm less land in the future but still produce more food?

The reason I’m so confident about that is that’s exactly what we’ve been doing. One of the wildest graphs that I drew when I was writing the book is a graph of total U.S. crop tonnage. We’re an agricultural juggernaut, and our total tonnage of crops goes up year after year. Included in that graph is total fertilizer use for all U.S. agriculture, total water use, and total land use. All of those are now going down, sometimes by quite a lot. I still find it a crazy phenomenon, but we are very clearly getting more from less of all the inputs to growing a crop, except sunlight. Fertilizer, water, and land, we’re getting more crops out year after year.

This is a very, very broad phenomenon. The USGS tracks, I believe, 72 different materials. I think all, but around six of them are now on a downward trend. The biggest exception is plastics, but there’s something interesting going on there as well. Overall plastics consumption used to grow even more quickly than the economy did. Plastics are incredibly useful. We use them all over the place. Now, plastics use is still increasing, but it’s increasing more slowly than the overall economy is. So, we’re already hitting relative dematerialization with plastics. I don’t know when exactly, but we’re going to hit peak plastics, even as our economy grows, and we’re going to start using less of it.

Is the trend toward dematerialization fast enough? We are at a time when we see the rising temperatures and environmental changes that are happening at a worrying pace that even with this growth—even with population growth—you can see how dematerialization and these technological trends are helping. But are they helping enough? Will they move quickly enough to make a difference?

Decarbonization is not happening quickly enough. It’s happening in the rich world. It’s not happening in the lower-income world. And in general, it is absolutely not happening quickly enough.

Think about a bathtub. We’ve got a tap, we’ve got a faucet that puts water in the bathtub, and we have a drain that takes water out. That bathtub is the earth’s atmosphere. The drain is how quickly carbon leaves the atmosphere. The faucet is how quickly we’re putting it in. The problem is that drain is not operating very quickly. The carbon that we put in hangs around in the atmosphere for decades or centuries.

So, we have to shut down the faucet even more quickly than we might think and find ways to increase the speed of the draining. We’re not doing it quickly enough, and my huge frustration is that we know the playbook. If we were actually interested in decarbonizing our economies, we know the playbook for doing it. We’re just doing a lousy job of following it.

When you look ahead, technologies are impossible to predict, right? Do you feel like the trends are moving in a good direction, or we’ll hit another plateau and this dematerialization trend will flatten out again?

Flatten out, or even reverse, right? I don’t think that’s what’s going to happen. Capitalism and tech progress are rising around the world quicker than they ever have before. In the year 2000, there were about 12 mobile phone subscriptions for every 100 people on the planet. Less than 20 years later, there are more mobile phone subscriptions than there are human beings on the planet.

The world is interconnected for the first time with powerful devices. The smartphones that people in low-income countries have are about as powerful as the first smartphones that you and I had. So, technology is spreading around the world really quickly, and that means that the people who have those devices are not going to buy a number of other things. They’re not going to buy film cameras, camcorders, alarm clocks, or answering machines. That is a big heavy pile of stuff that we used to have to exploit the earth to generate. That’s not what’s going to happen in the future. Those people are going to be getting transportation options via their phones. The technology means that there are logistic networks. Their trucks, planes, and whatnot are not going to drive around mostly empty most of the time. They’re going to have very high yield and high efficiency.

I want to be clear. I am not a utopian. We have real challenges ahead of us, but I think that this particular challenge of dematerializing our growth and our consumption, I’m really confident this is going to continue.

I have a 22-month-old, and I think a lot about the world that I grew up in and the world that she’s going to live in. You’re at this interesting place because you’re an economist, you study the digital economy, and you’re thinking about the future. What would you recommend to somebody who is just setting out on their career or an education, and they are looking at all the different places where they could live a meaningful life and make a difference in this global challenge? Whether it’s government and policy or whether it’s in technology and science, where do you feel we need more people, and what would you recommend to somebody who is trying to figure out the path that they can make a big difference in?

I get this question all the time. I feel like a big part of the reason I get it from parents of children of all ages is that we are absolutely heading into a time of great change and uncertainty. That’s inherently unsettling for a lot of people, and the stability that a lot of us felt when we were growing up—I think you’re correct that it’s not going to be there. We’re creating a very, very different world. How do you make a positive impact in that world?

I would say, just think about this broad trend of dematerialization, of doing more with less, and of treading more lightly on the planet, and there are all kinds of ways you can participate in that trend. Another one of the wild things I learned writing the book is that aluminum cans used to be about four or five times heavier than they are now. Just your beer can or your soda can weighed a lot more. Beverage companies and packaging companies worked hard to reduce that weight because the consumer doesn’t value it. All I want is my beer, and that aluminum costs money. You can think about it as corporate greed, which it is. At the same time, the cumulative savings are hundreds of thousands of tons of aluminum.

So, by participating in that process, go be a packaging engineer. Go work on CAD/CAM software. Go work on this trend of digitizing our world because then you’re also working on dematerializing our world and on treading more lightly on this beautiful planet that we all live on. And if you’re an aware and informed citizen, you can help steer governments and companies in the right direction here.

I think there’re tons of ways to be a positively involved citizen and consumer here. And, yeah, you should probably also think about having experiences instead of things. The research is pretty overwhelming that more things actually don’t make us very happy or satisfied. Go have beautiful experiences.

Jesse Ausubel, whom I mentioned before and whose work I respect greatly, has this great phrase. He says we need to make nature worthless. What he means by that is we need to make it economically worthless. So what if that tree’s over there? I don’t have any desire to chop it down. I can’t make a buck off it. Let me go sit under it and talk to somebody or read a book. He’s not saying nature is worthless. He’s saying let’s make its economic value low as quickly as possible. Amen to that.

TAKEAWAYS

Research has revealed a trend of dematerialization in the United States: As the economy is growing, the country is actually using less timber, metals, water, and other resources. And this trend is spreading to other parts of the globe.

  • New technologies and digitization are helping dematerialization happen. As individuals and companies do more online, for instance, they use fewer resources like paper.
  • Developing nations that are building their economy and looking to urbanize must build infrastructure, which traditionally has required vast amounts of resources. But these countries may reach urbanization quicker than expected, since they will follow different technology and materials paths than more prosperous nations.
  • While dematerialization is a promising development, it is not enough to stop climate change. Decarbonization is also needed, and it isn’t happening fast enough. Further action, like effective public policy, is required.

Adapted from “Dematerialization and What It Means for the Economy—and Climate Change” on HBR IdeaCast (podcast), September 17, 2019.

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