The service-stock trap: analysis of the environmental impacts and productivity of the service sector in Hungary

Abstract

Urbanization and the emerging share of the service sector in economic output may support the sustainability transition due to lower material input and emissions, while further accelerating the economic growth at the same time. Nevertheless, there are significant barriers to the transition. In this study, the service sector of Hungary and its four commercial sub-sectors have been analyzed with regard to their material requirement (input flows and stock) and greenhouse gas emissions (GHG) emissions utilizing EXIOBASE v3. General policy implications are also provided with special regard to costs, possible taxes and productivity of resources. The share of direct and indirect GHG emissions and material input generated by the sector was stable and moderate. A permanently improving trend is present in GHG, and material input intensity. Material stock accumulation in the service sector (capital stock), however, shows an ascending trend, and it has increased from 42% in 1995 to be 55% in 2015. Material input productivity of investments into services has increased until the economic crisis, then it starts to decline or stagnate; while overall stock productivity has decreased in two subsectors, and slow improvement was observable in sub-sectors of transportation and information and communication technology (ICT). Stock productivity of ICT and machinery capital stock was decreased dramatically in all sub-sectors. Four economic sub-sectors of the commercial services analyzed in this study have increased their capital stock from 130 to 288 Mt between 2000 and 2015.The exponential trend in material stock accumulation is an environmental issue with rising scientific concern and awareness, since it constitutes the basis of crucial waste management, resource scarcity and resource use challenges in the future. The current study indicates general reinforcement of the environmental pressure of material stock accumulation by the service sector. This phenomena was defined as the 'service-stock trap', which refers to the sign of a trade-off between the descending flowtype environmental impacts and ascending impacts of capital stock accumulation during the economic transition towards a service-based economy. As a promising way out of the trap, the resource tax was discussed in detail, which seems to be suitable for forming investment decisions of the business actors.

A comprehensive review of Hungarian futures studies in light of international journal articles

“…Dombi et al [ 17 ] carried out a socio-economic metabolism examination to compare household-level material flows and stocks to economy-wide material inputs and explore factors affecting the level of metabolism [ 34 ] at the household level. According to Dombi et al [ 19 ], there is no incentive to reduce the material stock accumulation in the future under the current economic conditions; however, urbanization and the increasing share of the service sector in economic output might support the sustainability transition due to its lower material input and emissions, while accelerating economic growth at the same time [ 15 ]. The management of material stock is central for reducing emissions and for optimizing natural resource use [ 16 ].…”

Mining the Built Environment: Telling the Story of Urban Mining

“…Environmental impacts: A significant part of the literature addressed the ecological implications of material flows and stocks. Many studies examined the correlation between GHG emissions and material stocks [46,[75][76][77][78][79][80], while others estimated wood-based materials or "carbon stock" [81][82][83], and there was also an interest in analyzing energy use retrospectively [20,[84][85][86] and estimating future energy demand [87][88][89][90][91][92]. In short, this part of the literature is significant because it presents various scenarios that demonstrate the magnitude of environmental harm that can be averted [52,93], especially in the context of renovation activities and retrofits that extend the life of building stock rather than end it [94][95][96].…”

Material Hide‐and‐Seek: Looking for the Resource Savings Due to International Trade of Food Products

“…The material stock of embodied capital in the Hungarian food supply chain was estimated by the production function of distinct sub-sectors and their net addition to stock (NAS), calculated as the material footprint of the gross fixed capital formation (GFCF) less depreciated capital stock and fossil fuel content of the footprint (for methodological details see Dombi, 2019).…”

“…For example, dairy and pig meat production in Denmark changes its MF composition significantly slower. For Hungary, estimation on net addition to stock (NAS) and the total amount of capital stock is available at sectoral level (Dombi, 2019), as an indicator of the material stock accumulation. If NAS does not drop together with food MF of Hungary, it might reflect, that the intensification of international trade is supported by the food supply chain's increasing stock accumulation.…”