Application of OECD Guidance on the Material Flow Accounting(MFA): Case of the Republic of Korea

Abstract

It is recognized that understanding the flow of materials into and out of the socio-economy is essential for reducing the stress to the environment, improving resource productivity and achieving sustainable development. Efforts are being made in the developed countries to develop the account of material flows, and OECD is preparing guidance manual on the material flow accounting to help countries with little experiences. Objective of this project is, based on the OECD guidance, to construct pilot material flow account, to analyze the progress toward sustainable development using indicators derived from the material flow accounting in comparison with EU countries and to make recommendations for further development of material flow accounting and related policies in Korea. The compiled national economy-wide material flow account by this project reveal the trend of total material input and consumption during the past 15 years in Korea. Total volume of material input and output increased by roughly 78% (0.72 billion tons) and 82% respectively during 1991-2005 period. Material use efficiency that means material input per GDP improved by 30% to 943 tons per million USD, but is still low when compared with average of EU countries. Material consumption per capita rose to 13.2 tons/year per person, which is close to EU average level. Overall, findings show the trend of relative dematerialization in which the rate of economic growth is bigger than that of material use, and the need of introducing vigorous decoupling policies that can reduce the material use while maintaining economic development. Accomplishments in this project will contribute to the future implementation of material flow accounting in Korea under the OECD guidance, with identified weaknesses in the current statistics system, areas of concern and related recommendations.