Eco-efficiency assessment of EU manufacturing sectors combining input-output tables and data envelopment analysis following production and consumption-based accounting approaches

Abstract

Assessing the footprint of anthropogenic activities has become particularly challenging in today's globalized markets, where a large number of economic transactions taking place across the globe need to be disentangled before the most critical sectors are identified. In this work, we present an approach to quantify the eco-efficiency of economic activities that combines multi-regional environmentally-extended input-output tables and data envelopment analysis. We employ this method to assess the European Union manufacturing sectors in terms of three inputs -global warming potential, potential acidifying equivalent and tropospheric ozone forming potential- and one output (economic wealth), following both production and consumption-based accounting approaches. Our approach classifies economic sectors as efficient and inefficient, and for the latter it provides improvement targets that if attained would make them efficient. We find that there is a significant mismatch at the sectorial level between both accounting schemes, each providing complementary information for policy-making. In the production-based case, targets allow identifying sectors and pollutants requiring more stringent regulations and/or higher investments in cleaner technologies. Conversely, the consumption-based accounting allows identifying the ultimate sources of impact, an insight that can assist in the selection of alternative “cleaner” suppliers via eco-labelling of products/services and proper taxation schemes.