Dematerialization through services is a popular proposal for reducing environmental impact. The idea is that by shifting from the production of goods to the provision of services, a society can reduce its material demands. But do societies with a larger service sector actually dematerialize? I test the `dematerialization through services' hypothesis with a focus on fossil fuel consumption and carbon emissions --- the primary drivers of climate change. I find no evidence that a service transition leads to carbon dematerialization. Instead, a larger service sector is associated with greater use of fossil fuels and greater carbon emissions per person. This suggests that `dematerialization through services' is not a valid sustainability policy.
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