Partitioning of resources in production: an empirical analysis

Industrial economies ingest materials, energy and information to produce goods and services and excrete wastes and emissions. Wastes can be minimized and the relative amounts of resources, which go into goods and services, as opposed to waste, are essential to clean production and to the sustainability of the production system. A regression model based on empirical data is presented that provides a partition coefficient expressing the ratio of energy (or material) resources invested in goods to energy going to waste. Partition coefficients are developed for five countries and are shown to be related to GDP, energy and material consumption and energy and waste intensities. Higher partition coefficients mean higher productivity and lower energy, waste and material intensities. In addition, energy use/capita and pollution/capita is lower. The price of energy to the industrial sector is related to the partition coefficient. The policy implications are that partitioning of resources to goods should be maximized and waste minimized for economic as well as environmental reasons.