How Dematerialization Is Changing the World: A Response to Giorgos Kallis

We wish to thank Dr. Giorgios Kallis for his wide-ranging response to our lead essay and for his collegiate tone. Kallis writes that “The problem now is not resource scarcity, but damage to the environment (e.g., biodiversity).” He notes that “Resource use grows hand in hand with GDP, even in service economies like the US or the UK where economists expected reductions,” and he advocates in favor of “degrowth.” Finally, Kallis believes that “satisfactory levels of wellbeing can be achieved at a fraction of the highest national incomes.”

The focus on environmental damage as a by-product of population growth, economic growth, and growth in consumption has a long pedigree. In 1982, for example, a group of ecological economists met in Stockholm and published a manifesto warning of natural limits on human activity. “Ecological economists distinguished themselves from neo-Malthusian catastrophists by switching the emphasis from resources to systems,” wrote one historian of this period. Their “concern was no longer centered on running out of food, minerals, or energy. Instead, ecological economists drew attention to what they identified as ecological thresholds. The problem lay in overloading systems and causing them to collapse.”[1]

Four decades later, scientific debate about “ecological thresholds” remains unsettled—even when it comes to the basic question of measurement.[2] In August 2020, for example, a monthly peer-reviewed scientific journal called Nature Ecology & Evolution published a study based on 36 meta-analyses of more than 4,600 individual studies covering the last 45 years of research on ecological thresholds. Nine German, French, Irish and Finnish ecologists found that

threshold transgressions were rarely detectable, either within or across meta-analyses. Instead, ecological responses were characterized mostly by progressively increasing magnitude and variance when pressure increased. Sensitivity analyses with modelled data revealed that minor variances in the response are sufficient to preclude the detection of thresholds from data, even if they are present. The simulations reinforced our contention that global change biology needs to abandon the general expectation that system properties allow defining thresholds as a way to manage nature under global change. Rather, highly variable responses, even under weak pressures, suggest that “safe-operating spaces” are unlikely to be quantifiable.[3]

Surely, such uncertainty does not warrant a dramatic departure from pro-growth policies. Let us make four additional points. First, as Ted Nordhaus from the Breakthrough Institute in California observed in 2019, pessimists assume that humans will continue to reproduce with abandon. In reality, data show that as an economy becomes more developed, birth rates begin to fall. The massive population growth in recent decades is due to rising life expectancy, not rising fertility.[4] The birth rates of the United States, Europe, Japan, China, and large parts of Latin America have actually fallen below the replacement level of 2.1 children per woman for some time. That means that their populations are actually starting to shrink. It’s likely that the rest of the world will follow that trend. What does that mean?

According to Ron Bailey, “World population will likely peak at 9.8 billion people at around 2080 and fall to 9.5 billion by 2100 in the medium fertility scenario calculated by demographer Wolfgang Lutz and his colleagues at the International Institute of Applied Systems Analysis. Alternatively, assuming rapid economic growth, technological advancement, and rising levels of educational attainment for both sexes—all factors that tend to lower fertility—Lutz projects that world population will more likely peak at around 8.9 billion by 2060 and decline to 7.8 billion by the end of the twenty-first century.”[5]

Considering that there were 7.8 billion humans on the planet in 2020, it is possible that the world’s population will be roughly the same size 80 years from now. If Lutz’s latter estimates are correct, then the world may actually end up facing an underpopulation rather than an overpopulation problem. That’s because, in the absence of a huge breakthrough in artificial intelligence, human beings remain the sole producers of ideas, inventions, and innovations that drive technological, scientific, and medical progress.

Second, pessimists, who recognize that the human population may actually shrink in the future, worry that free enterprise will continue to drive human consumption of resources to higher and higher levels.[6] Again, the data do not agree. In our response to Katherine Trebeck and Dirk Philipsen, we already mentioned McAfee’s 2019 book, More from Less: The Surprising Story of How We Learned to Prosper Using Fewer Resources―and What Happens Next. Sophisticated economies, McAfee found, are currently producing ever more goods and services, while at the same time using ever fewer resources. That is a result of a sustained transition in advanced countries from industry to less resource-intensive economic activities that deal with services and information.

To that process we may also add dematerialization, which refers to declining consumption of material and energy per unit of gross domestic product (GDP). According to Jesse Ausubel from Rockefeller University and Paul E. Waggoner from the Connecticut Agricultural Experiment Station, “If consumers dematerialize their intensity of use of goods and technicians produce the goods with a lower intensity of impact, people can grow in numbers and affluence without a proportionally greater environmental impact.”[7]

Why would people do that? Dematerialization replaces atoms with knowledge and makes economic sense to producers, since spending less on inputs can swell profit margins and make outputs cheaper and therefore more competitive.[8] It makes sense to consumers as well. Consider, for example, the growing use of smartphones. The product combines functions that previously required a myriad of separate devices, including a telephone, camera, radio, television set, alarm clock, newspaper, photo album, voice recorder, maps, compass, and more.

Replacement of many devices with one produces substantial efficiency gains. How substantial? In 2018, a team of 21 researchers led by Professor Arnulf Grubler from the International Institute for Applied Systems Analysis in Austria estimated the “savings from device convergence on smartphones … for materials use (device weight) and for its associated embodied energy use.” They found that smartphones can reduce material use by a factor of 300. They can reduce power use by a factor of 100 and standby energy use by a factor of 30.[9] That means that we use 99.67 percent less material, 99 percent less power, and 97 percent less standby energy.

To summarize, pessimists worry that future growth will mirror that seen during the Industrial Revolution: bigger and deeper mines, bigger and more polluting steel mills, and so on. But economic growth does not have to come from bigness. On the contrary, it can—and does—come from “smartness” with things like miniaturization, as in the computing industry, which saw the replacement of massive mainframe computers with smaller and much more efficient personal computers. To quote the economic historian Joel Mokyr,

The main logical issue here is that economic growth can be resource saving as much as resource-using, and that the very negative effects that congestion and pollution engender will set into motion searches for techniques that will abate them. Such responses may be more effective in democratic than in autocratic regimes because concerned public opinion can map better into public policy, but in the end the need for humans to breathe clean air is about as universal a value as one can find. Investment in soil reclamation, desalination, recycling, and renewable energy count just as much as economic growth as economic activities that use up resources. Whether or not wise policies will help steer technological progress in that direction, the basic notion that per capita income growth has to stop because the planet is finite is palpable nonsense.[10]

Third, pessimists assume that humanity will sit idly by and allow environmental problems to overwhelm our planet. That is highly improbable given our species’ track record of tackling past challenges. According to Nordhaus, it took six times as much land to feed a single person in the Neolithic period as it does now. If we were still harvesting einkorn with sticks and stones, we would certainly be above our carrying capacity. Instead, we’ve improved our agricultural efficiency so much that less than 2 percent of the U.S population actually has to farm at all.[11]

As Ausubel and his colleagues noted in their 2013 article “Peak Farmland and the Prospect for Land Sparing,” if the productivity of the world’s farmers increases to U.S. levels, humanity will be able to restore at least 146 million hectares of cropland land to nature. This is an area two and a half times that of France or the size of ten Iowas.[12] As Bailey observed, “the UN Food and Agriculture Organization reports that land devoted to agriculture (including pastures) peaked in 2000 at 4.915 billion hectares (12.15 billion acres) and had fallen to 4.828 billion hectares (11.93 billion acres) by 2017. This human withdrawal from the landscape is the likely prelude to a vast ecological restoration over the course of this [21st] century.”[13]

In fact, as we write, many of the problems identified by the pessimists are being addressed or are on the cusp of being addressed. The forest coverage is growing in rich countries, species are being protected at record levels throughout the world, freshwater reserves are being replenished through desalination in the Middle East, soil erosion is being reduced through precision agriculture in Israel, and CO2 emissions have fallen in nuclear-friendly France and Sweden. In the future, genetically modified crops could lead to a decline in the use of nitrogen and phosphorus, and wild fish stocks could bounce back through greater use of aquaculture, which is rapidly expanding in China. What’s needed to address current and future problems is freedom and brainpower.

Finally, Kallis is right to note that “de-growth” cannot be expected from poor countries “that need to industrialize and produce necessities.” Yet that is exactly where the greatest population growth and environmental damage occurs and will be occurring for decades to come. With their shrinking populations and environmentally friendly policies, rich countries have greatly reduced their impact on the planet, and further measures—unless they are exceedingly expensive in terms of money and reduced living standards—can only make a marginal difference to the overall environmental trajectory.

Kallis seems to be aware of that when he argues that “satisfactory levels of wellbeing can be achieved at a fraction of the highest national incomes.” Unlike Kallis, we are unconvinced that such measures (even if desirable, which we don’t believe they are) can be sustained within the democratic context. Opinion polls show that support for pro-green policies in rich countries falls off in proportion to the expected reduction in the standard of living. Gilet jaunes, anyone?


[1] Mark Sagoff, “The Rise and Fall of Ecological Economics: A Cautionary Tale,” The Breakthrough, January 13, 2012,….

[2] A threshold corresponds to a level of environmental pressure that creates a discontinuity in the ecosystem response to this pressure. Thresholds and tipping points pervade environmental policy documents as they allow definition of levels of pressure below which ecosystem responses remain within “safe ecological limits” and above which response magnitudes and their variances increase disproportionately.

[3] Helmut Hillebrand et al., “Thresholds for ecological responses to global change do not emerge from empirical data,” Nature Ecology & Evolution 4, no. 1502-1509 (August 17, 2020):

[4] Ted Nordhaus and Sam Haselby, “The Earth’s carrying capacity for human life is not fixed,” Aeon, July 5, 2018,….

[5] Ronald Bailey and Marian L. Tupy, Ten Global Trends Every Smart Person Should Know: And Many Others you Will Find Interesting (Washington D.C.: Cato Institute, 2020), 13.

[6] Canadian researchers Pierre Desrochers and Joanna Szurmak note that “the idea that effective attempts to address climate change must involve population control – and that population control in itself is insufficient if overall mass consumption keeps increasing – has become a new form of what author Greg Easterbrook calls ‘collapse anxiety,’ which he defined as a ‘widespread feeling that the prosperity [of the developed world] cannot really be enjoyed because the Western lifestyle may crash owing to economic breakdown, environmental damage, resource exhaustion…or some other imposed calamity.’” Pierre Desrochers and Joanna Szurmak, Population Bombed: Exploding the link Between Overpopulation and Climate Change (London: Global Warming Policy Foundation, 2018), 2.

[7] Jesse H. Ausubel and Paul E. Waggoner, “Dematerialization: Variety, caution, and persistence,” PNAS 105, no. 35 (September 2, 2008): 12774-12779,

[8] “As argued three decades ago by economist and demographer Mikhael Bernstam … throughout the second half of the twentieth century market economies became wealthier and cleaner while centrally planned ones stagnated or even regressed while becoming increasingly polluted. Bernstam considered this outcome the ‘most important reversal in economic and environmental history since the Industrial Revolution’. A short version of his analysis is that this result can be attributed to the cost minimization paradigm of market economies as opposed to the input maximization of centrally planned ones. His most relevant insight for this essay, however, is that discharges into the environment declined in market economies for reasons ranging from spontaneous energy transitions (e.g., the substitution of coal and fuel oil by natural gas and hydro-electricity) to the development and adoption of better pollution control and disposal technologies made possible by increased wealth (e.g., from sewage treatment and landfilling to waste incineration and (deep) underground injection of hazardous wastes). The elimination or proper handling of waste (i.e., uselessly processed resources and economically useless production—scrap, spills, slag, discards, refuses and other processing losses; destroyed primary resources; losses of intermediary and final output in transportation and storage), rather than greater material use as a result of increased production and consumption, thus ultimately determined the impact of economic growth on the environment.” See Pierre Desrochers, “The Paradoxical Malthusian. A Promethean Perspective on Vaclav Smil’s Growth: From Microorganisms to Megacities (MIT Press, 2019) and Energy and Civilization: A History (MIT Press, 2017),” Energies 13, no. 20: 5306, .3390/en13205306.

[9] Arnulf Grubler et. al., “A Low Energy Demand Scenario for Meeting the 1.5 °C Target and Sustainable Development Goals without Negative Emission Technologies,” Nature Energy 3, no. 1 (June 4, 2018): 515–527, h

[10] Joel Mokyr, “The Past and the Future of Innovation: some lessons from Economic History,” National Bureau of Economic Research, May 2017,, 24.

[11] Ted Nordhaus and Sam Haselby, “The Earth’s carrying capacity for human life is not fixed,” Aeon, July 5, 2018,….

[12] Ronald Bailey, “5 Environmental and Human Trends Worth Celebrating This Earth Day,” Reason, April 22, 2019,… -earth-day/.

[13] Ronald Bailey and Marian L. Tupy, Ten Global Trends Every Smart Person Should Know: And Many Others you Will Find Interesting (Washington D.C.: Cato Institute, 2020), 111.

Also from this issue

Lead Essay

  • Marian Tupy and Gale Pooley argue that empirically speaking, resources are growing more abundant, not just as measured by inflation-adjusted price, but as measured by time prices: An hour of labor today generally buys a lot more than a comparable hour in the past. Additional human beings add to our economic capacity rather than diminishing it, because people are the solvers of economic problems.

Response Essays

  • Giorgos Kallis argues that we shouldn’t want economic growth to continue indefinitely. Nor will it do so. The relentless pursuit of economic growth will eventually lead to a collapse. Better, says Kallis, is to aim for prosperity without growth, which he calls “the defining challenge for twenty-first century economics.”

  • Katherine Trebeck and Dirk Philipsen say that the relentless pursuit of economic growth is harmful in the long term. While poverty should be alleviated, there is such thing as material sufficiency, and unfortunately, markets don’t always point at it. Often, they encourage us to substitute harmful products for beneficial natural goods. Developed economies should reposition themselves to provide economic stability, human dignity, environmental protection, and healthy communities.