, Volume 7, Issue 2-3, pp 227-244

International economics of resource productivity – Relevance, measurement, empirical trends, innovation, resource policies

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This paper undertakes a step to explaining the international economics of resource productivity. It argues that natural resources are back on the agenda for four reasons: the demand on world markets continues to increase, the environmental constraints to using resources are relevant throughout their whole life cycle, the access to critical metals could become a barrier to the low carbon economy, and uneven patterns of use will probably become a source of resource conflicts. Thus, the issue is also of relevance for the transition to a low carbon economy. ‚Material Flow Analysis’ is introduced as a tool to measure the use of natural resources within economies and internationally; such measurement methodology now is being harmonized under OECD auspices. For these reasons, the paper argues that resource productivity—that is the efficiency of using natural resources to produce goods and services in the economy—will become one of the key determinants of economic success and human well-being. An empirical chapter gives evidence on time series of resource productivity increases across a number of economies. Introducing the notion of ‘material flow innovation’, the paper also discusses the innovation dynamics and issues of competitiveness. However, as the paper concludes, market barriers make a case for effective resource policies that should provide incentives for knowledge generation and get the prices right.

A previous version has been presented at the ‚Shanghai Forum 2010’, Subforum on the “Emerging Energy & Low Carbon Economy: the Engine for Asia Economic Transformation”, May 29 – 31, 2010. I wish to thank the participants as well as Meghan O’Brian for useful comments.