Chart of the Week



The trends in the relationship between GDP and the amount of industrial waste

10/01 2024

Author: Eiji Hosoda

Promotion of 3Rs (reduce, reuse and recycling) is an indispensable factor for realization of a circular economy. Clearly, reduction of waste comes first, according to the principle of waste hierarchy, which is applicable to both municipal solid waste (MSW) and industrial waste (IW). It is shown in this Chart of the Week (14th October 2022 and 3rd October2023) that the amount of MSW began to decrease around 2000 even though real GDP increased. Apparently, decoupling was successful for MSW, possibly thanks to the 3Rs policy which had been adopted since the early 1990s in Japan.

Such trends are not clearly seen for IW as shown in Chart of the Week (1st April 2023), although one can see a decrease in industrial waste generation in the long-run.　Let me show the trend of generation of IW in relation to real GDP in the following figure.



The figure shows the trend of the ratio of the amount of IW to real GDP, which is over all decreasing apart from temporal swinging-backs. This means that a unit of GDP is produced with less amount of IW generation in the long-run, and that the Japanese economy is getting slimmer in terms of IW generation.

It is worth pointing out that the IW/GDP ratio increased as the amount of IW increased in some periods (eg. from 1993 to 1994, from 2002 to 2003, from 2013 to 2014 and 2018 to 2019), while the ratio decreased as the amount of IW decreased in other periods (eg. from 1992 to 1993, from1997 to 1999, and from 2007 to 2008). However, the circumstances were quite different in the periods of 2008-2009 and 2018-2020: the IW/GDP ratio increased even though the amount of IW decreased. This happened because the rate of a decrease in real GDP is larger than the rate of a decrease in IW.

Notice that the former period coincides with that of the financial crisis caused by the bankrupt of Lehman Brothers in 2008, while the latter with that of the pandemic of COVID 19 around 2019. It is often mentioned that the socio-economic anomalies caused by the two shocking incidences changed the structure of the Japanese economy, even affecting the relationship between waste generation and real GDP. Yet, what is behind the scenes remains to be explored.