Decomposition Analysis of the Material Consumption in the European Union

The decomposition analysis (DA) has become a widely accepted analytical tool for policymaking on environmental issues. By means of the Log-Mean Divisia Index Method (LMDI) a decomposition of the data on the Domestic Material Consumption (DMC) in the European Union (EU) in 2002 - 2014 is carried out. To detect the factors of de/coupling of the environmental variable, represented by the DMC, from the economic variable, represented by the GDP, in the EU economy, the changes of DMC were divided into three effects. These factors include the economic activity (scale), the composition or structure of the EU economy with respect to the countries, and material intensity of the countries. The results indicate that the intensity effect showed the highest magnitude in the longer-term periods 2002 2014 and 2004 2014, but overall and in the majority of years, this effect was negative. The scale effect showed the second highest extent, whereas the composition effect was only slight. Both of them were positive in the majority of the years as well as in total.