Assessing the eco-efficiency of U.S. manufacturing industries with a focus on renewable vs. non-renewable energy use: An integrated time series MRIO and DEA approach

Abstract

Abstract This study investigated the global supply chain-linked renewable and nonrenewable energy use impacts and economic output of U.S. manufacturing industries over a twenty-year period. Considering energy use impacts and economic outputs together within the scope of a global-trade-linked, cradle-to-gate life cycle provides a comprehensive understanding of the environmental and economic impacts of industrial activities. In the first phase of the methodology, twenty multi-region input-output models were built to assess the energy and economic output nexus using a time series approach. Sixteen energy carriers were considered and aggregated in terms of renewable and nonrenewable energy use impacts. The second phase of the methodology focused on benchmarking U.S. manufacturing industries’ eco-efficiency, considering renewable to nonrenewable energy use and economic output. To accomplish this, data envelopment analysis (DEA) models were developed, and two benchmarking (eco-efficiency) measures were proposed, namely: renewability ratio (RR) and economic-output-induced renewability ratio (E-RR). The results indicated that the economic output of the manufacturing industries exhibited a steady, sustainable growth. Similar growth was observed in nonrenewable energy use. In contrast, the trend in renewable energy use was seen to be stagnant. No statistically significant improvement was observed in either the RR or E-RR measures, which were found to parallel the multi-region input-output analysis (MRIO) results. Although an increase in both the mean RR (0.3–0.4) and the mean E-RR (0.38–0.52) scores was recorded from 1995 to 2014, this was concluded to be unsatisfactory, since the majority of the industries’ eco-efficiency results were still below 0.5. Such an unsatisfactory result could be attributed to an imbalanced growth in nonrenewable energy use and economic output relative to renewable energy use. The findings of this study suggest that substantial policy changes are required immediately to shift the negative trend in renewable energy use to comply with UN Sustainability Development Goals 7 and 13.