Diagnosis: Has the Economy Behaved Sustainably?

The title question of this chapter cannot be answered unequivocally. Economic welfare measures may refer to the ultimate goal of economic activity. However, they suffer from problems of measuring the utility of economic benefits and the disutility (damage) from environmental impacts. Material flow indicators are more specific: they indicate that the relatively strong sustainability concept of dematerialization is still an elusive goal, nationally and globally. Green accounting case studies show weak sustainability for most economies, with some exceptions, notably of African countries which appear to live off their produced and natural capital base.

Tracing the total, direct and indirect, environmental impacts of economic activities and their driving forces is the task of input-output and decomposition analyses. To date, such studies are still isolated efforts, dealing with selected pollutants or the usual environmental placeholder of CO₂ emission.