A review of recent multi-region input–output models used for consumption-based emission and resource accounting

Consumption- and production-based accounting approaches for national greenhouse gas (GHG) emissions provide different insights to support climate policymaking. However, no study has yet comprehensively assessed the consumption-based GHG emissions of the entire New Zealand’s economy. This research, for the first time, quantified New Zealand’s GHG emissions using both consumption- and production-based accounting approaches and considered the policy implications for adopting a consumption-based approach over a production-based approach. A global multi-regional input-output (MRIO) analysis was undertaken to calculate the consumption- and production-based GHG emissions of New Zealand for the year 2012. The MRIO analysis was based on the Eora database, which accounts for 14,839 industry sectors from 189 countries. Given the sectoral classification of each country is quite different and in order to ease interpretation of the results, the industry sectors of each country were classified and aggregated into 16 key sectors, and GHG emissions were calculated for those key sectors. The MRIO analysis showed that New Zealand’s consumption- and production-based GHG emissions in 2012 were 61,850 and 81,667 ktCO2eq, respectively, indicating that the country was a net exporter of GHG emissions in 2012. The dominant contributors to the consumption-based GHG emissions were the other services and construction key sectors (each representing 16% of consumption-based emissions), followed by food and beverages (14%), transport and equipment (12%) and financial and trade services (11%), whereas the dominant contributor to the production-based GHG emissions was the agriculture key sector (representing 52% of production-based GHG emissions). The results of the study provided two key insights to support climate mitigation activities and policymaking. First, the consumption- and production-based accounting approaches results have different rankings for the most dominant sectors contributing to New Zealand’s GHG emissions. Second, only the consumption-based accounting approach enables the quantification of the embodied emissions in New Zealand’s trade activities, and it indicated that a large proportion of GHG emissions are embodied in New Zealand’s trade activities. These insights, therefore, have important implications for future policies that could positively influence the consumption patterns of New Zealand citizens and the production structure and efficiency of New Zealand’s trade partners. This research quantified New Zealand’s GHG emissions using both consumption- and production-based accounting approaches. Given the two accounting approaches provided different insights, both approaches should be used in a complementary way when developing climate policies. However, implementation of a consumption-based accounting approach to support development and implementation of climate policies and instruments requires further consideration.

Use of nested multi-regional input–output analysis for the evaluation of subnational emission reduction policies: A case of Japanese prefectures

Multi-regional input–output analysis of the relationship between environmental footprints and the import dependence of Japanese prefectures

National policies for reducing environmental pressures stemming from emissions and the use of natural resources usually adopt a producer approach, i.e. the legislation refers to pressures occurring within the territorial boundaries of a country. An alternative approach to environmental accounting is the consumer approach, which includes environmental pressures associated with imports for domestic consumption, wherever these pressures occur. The carbon footprint, for example, is such an approach, in which CO2 or greenhouse gas (GHG) emissions are considered from a consumer's perspective. The consumer approach may offer new ways for policies to reduce pressures, and therefore it would be interesting to adopt this perspective in national environmental policy-making and international negotiations. To gain insight into the differences between the approaches, this paper discusses the concepts of both, showing the results of an empirical analysis and going into the application of the two different perspectives in (international) environmental policies. Due to international trade, the environmental pressures accounted for in a producer's and a consumer's perspective are usually not the same for a country. This paper presents a worldwide overview, comparing the outcomes for the two approaches with regard to GHG emissions and land use, for 12 world regions. Furthermore, for GHG emissions, a quantitative comparison was made between 87 countries and regions covering the world. Consumption-related GHG emissions and land use per capita were calculated with a full multi-regional input–output (MRIO) model. MRIO analysis is an attractive method for footprint analyses in an international context. The research shows that, for most developed countries, GHG emissions and land use are higher in the consumer approach than in the producer approach. For most developing countries, the opposite is true. Before applying national targets to the consumer approach – for instance, in climate policies – further improvements and standardisation of methodology and data will be necessary.

Examining the global environmental impact of regional consumption activities — Part 2: Review of input–output models for the assessment of environmental impacts embodied in trade

Understanding the consumption-based accounting (CBA), production-based accounting (PBA), and emissions embodied in trade is an important prerequisite for designing climate mitigation policies. Environmentally extended input–output (EEIO) models have been developed to evaluate the linkages between economic activities and environmental impacts as well as the embodied emissions in goods and services that are traded between countries. In this study, an environmentally extended global multi-regional input–output (EE GMRIO) analysis is performed to calculate Turkey’s CBA emissions and import-based embodied emissions for the year 2015 using the Eora26 database, which is a simplified version of the Eora database adapted to 26 economic sectors. The key sectors and sectoral carbon intensities of countries are determined in terms of embodied emissions in imports for household consumption. Our results indicate that Turkey was a net importer of greenhouse gas (GHG) emissions in 2015 and about 10% of total emissions of the final consumption in Turkey have occurred in other countries. The dominant contributing sectors to a nation’s GHG emissions can be quite different for the CBA and PBA approaches and the efforts to reduce GHG emissions requires a holistic approach. Import-based household emissions are assessed in terms of countries, sector and GHG intensities. Our results indicate that Turkey was a net importer of GHG emissions in 2015 with its approximately 10% of the total and 7.7% of household final consumption emissions having occurred in other countries. This also suggests that imported goods and services for household consumption have been produced in those countries with relatively low emission intensities. Considering Turkey’s emissions reduction targets, these results provide methodological benefits that will enhance national efforts by giving invaluable inputs about the emission intensity of imported and exported goods and better guidance to policy makers about future strategies for low-carbon manufacturing and shifting consumption patterns.

The trends of consumption-based emissions in China have a major impact on global greenhouse gas (GHG) emissions. Previous studies have only focused on China’s energy-related consumption-based emissions of CO2 or specific non-CO2 GHGs without taking overall consumption-based non-CO2 GHG emissions into account. Based on a constructed global non-CO2 GHG emissions database, combined with CO2 emissions data, this paper fills this gap through an examination and analysis of China’s GHG emissions using a global multi-regional input–output (MRIO) model for 2004, 2007 and 2011, and identifies the major factors driving changes in consumption-based emissions through a structural decomposition analysis (SDA). The results show that compared with CO2 emissions, CH4, N2O and F-gases emissions all increased more rapidly. Among consumption-based non-CO2 GHG emissions, investment-based emissions experienced the fastest growth, but the net exports of non-CO2 GHG emissions dropped drastically in recent years. While investment in total final consumption demand is the most influential factor for CO2 emissions, household consumption most significantly affects the growth in consumption-based non-CO2 GHG emissions.

Within Indonesia, the structure of consumption and production differs significantly across provinces. This implies that carbon footprints and intensities between provinces are also diverse. This paper calculates historical consumption- and production-based carbon emissions at the provincial level using a multi-scale input-output (IO) database for 2010, in which an environmentally extended multi-regional IO (EE MRIO) table for 34 Indonesian provinces is integrated in the global EE MRIO EXIOBASE with data for 43 countries and 5 rest of the world regions. Emissions from consumption are detailed by product and their points of origin, while emissions from production are detailed by industry and their destinations. Our results show the heterogeneity of Greenhouse Gas (GHG) emissions under both sides. The Java region is a net importer of carbon emission, while Sumatra and Kalimantan are net exporters. In the global context, the Asia Pacific region plays important role in national GHG emissions. Services product contributed 57.1% of national consumption-based GHG emissions, followed by manufacture (30.6%), and agriculture (12.3%). On the national level, 63.5% of national GHG emissions are related to household consumption. There is a high disparity across provinces in Indonesia in carbon footprints. Provincial average per capita carbon footprints vary from 2 t CO2e/capita in East Nusa Tenggara to 13.84 t CO2e/capita in East Kalimantan. Carbon intensity also varies from 0.83 kt CO2e/M Euro in Jakarta to 2.37 kt CO2e/M Euro in North Kalimantan. Agriculture and food products dominate household carbon footprints, while construction leads in government carbon footprints. Utilities and transportation services play important roles on national carbon intensities. We further correlated the Human Development Index (HDI) with per capita carbon footprints and expenditure, and find that provinces with similar GHG emissions and expenditure per capita income as Java, tend to have a lower HDI. Understanding development status and province-level characteristics is important for selecting policy strategies.

Tourism is a non-negligible source of greenhouse gas (GHG) emissions. Using South Tyrol (ST) – a small region with a tourism-intensive economy situated in the North of Italy – as a case study, this article discusses a multiregional input–output (MRIO) framework for calculating the direct and indirect emissions embodied in tourist consumption of goods and services at a subnational level. Compared to more standard single-region implementations of the input–output approach, MRIO analysis offers a more accurate depiction of the amount of emissions, that is, embodied in imports, because it acknowledges that in the modern economy supply chains often stretch across multiple borders and that the carbon intensity of production can vary widely from one location to another. Operationalizing the framework has become relatively straightforward since a number of new global MRIO databases have become available in recent years. Furthermore, the analysis could easily be extended to other environmental externalities of tourism, where the model’s capability to explicitly account for spatial spillovers might also be of interest. The modelling exercise at the heart of the article suggests that, over the course of 2010, the process of producing the goods and services consumed by tourists in ST resulted in 1092 kt CO2e of GHGs being emitted into the atmosphere. This is equivalent to average emissions of 191 kg CO2e per overnight visitor, 38 kg CO2e per night or 0.316 kg per euro of tourist expenditure. Direct emissions account for about one-fourth of the total. Almost four-fifths of total emissions appear to be the result of productive activities sited outside ST itself.

Understanding the drivers of many environmental problems requires enumerating the global supply chain. Multi-region input–output analysis (MRIOA) is a well-established technique for this purpose, but constructing a multi-region input–output table (MRIOT) can be a formidable challenge. We constructed a large MRIOT using the Global Trade Analysis Project (GTAP) database of harmonised economic, IO, and trade data. We discuss the historical development of the GTAP-MRIO and describe its efficient construction. We provide updated carbon footprint estimates and analyse several issues relevant for MRIO construction and applications. We demonstrate that differences in environmental satellite accounts may be more important than differences in MRIOTs when calculating national carbon footprints. The GTAP-MRIO is a robust global MRIOT and, given its easy availability and implementation, it should allow the widespread application of global MRIOA by a variety of users.

Urban carbon transformations: unravelling spatial and inter-sectoral linkages for key city industries based on multi-region input–output analysis

In line with recent trends toward decentralization, prefectural and municipal governments in Japan are becoming increasingly involved with managing global warming in their regions. As a result, there is a new need to estimate the environmental effects of regional economic activities, which can be used to establish effective energy policies at the regional level. However, the details of these effects remain unclear due to a lack of basic data. In this paper, we construct an original multi-region input–output (MRIO) table based on interregional shipments among Japan’s 47 prefectures; this is done using the prefectures’ single-region input–output (SRIO) tables and by applying a non-survey technique. We use the constructed MRIO table, which we make freely available online, to estimate the carbon footprint and carbon leakage of every region and consider the structure of emissions at the regional level from the standpoints of consumer and producer responsibility. The results reveal that production-based emissions often differ significantly from consumption-based emissions. In addition, the regional-level ratio of carbon leakage to carbon footprint is 51.7 % on average and ranges from 34.8 to 79.8 %. Furthermore, the effects of economic activity in and around Tokyo in terms of CO2 emissions and leakage vary across regions. JEL classification: Q54, R11, R15

On the suitability of input–output analysis for calculating product-specific biodiversity footprints

Compiling and using input–output frameworks through collaborative virtual laboratories

A global, scope-based carbon footprint modeling for effective carbon reduction policies: Lessons from the Turkish manufacturing