Do sectoral material efficiency improvements add up to greenhouse gas emissions reduction on an economy‐wide level?

This article aims to provide a better understanding of the contribution of material efficiency (ME) improvements to climate mitigation from an economy‐wide perspective. We employ the Global Trade and Environment Model to investigate and quantify the part played by ME gains at different stages of the supply chain and in different sectors of the economy to an economy‐wide reduction of greenhouse gas (GHG) emissions. Our study focuses on three material categories: iron and steel, non‐ferrous metals, and non‐metallic minerals for construction. We find that ME improvements in iron and steel production and consumption processes can contribute to reducing GHG emissions, but only by a small amount. Eco‐design and novel technologies that use less materials in general, can also contribute to GHG emission reduction. Such mitigation potential is especially large for the construction of buildings and infrastructure due to the sector's massive use of non‐metallic minerals with a large climate impact (e.g., cement). However, process efficiency and reduced demand for the three materials do not necessarily lead to reduced GHG emissions on an economy‐wide level and can even result in increased GHG emissions due to a rebound effect in other sectors and other processes. As expected, ME policies were more effective for climate mitigation when combined with a more sustainable socio‐economic pathway.