An empirical analysis of dematerialisation: Application to metal policies in The Netherlands

This paper presents a first empirical step in filling the gap between physical and economic models, by combining a material flow model and an applied general equilibrium (AGE) model. The goal of this paper is threefold. Firstly, a new methodology is discussed for the integration of material and economic flow models. Secondly, the new methodology is tested for its empirical applicability by simulation of material policies. Finally, the analysis leads to the identification of major steps for filling the existing gap between physical and economic models further. Fiscal material policies are imposed to reduce the use of specific materials. The material levy and the accompanying labour tax reduction shift the tax burden from labour to the use of materials. The empirical illustration shows that the physical and economic flows can be made mutually compatible, and that the combined model can be used for empirical analysis of material policies. From this analysis of material policies in an economic model it may be concluded that the combination of an AGE model and a material flow model may produce an appropriate tool for analysing environmental, sectoral and distributional effects of dematerialisation policies. © 2000 Elsevier Science B.V. All rights reserved.