Evaluating energy embodied in national products through Input-Output analysis: Theoretical definition and practical application of international trades treatment methods

Abstract

Production activities of modern economies are ultimately sustained by depletion of non-renewable fossil fuels. In the perspective of non-renewables displacement, an accurate evaluation of energy embodied in goods and services is crucial in order to select among alternative products or policies. Economic-based Input-Output models are widely used for this purpose: however, due to the increasing amount of international trades of products, definition of appropriate methods to account for the energy embodied in trades is nowadays crucial.In this paper, international trades treatment methods in Input-Output analysis are comprehensively formalized and applied to a case study based on the World Input-Output Database (WIOD). Energy embodied in final demand and in detailed products of key national energy sectors have been evaluated for the WIOD countries according to Single-Region and Multi-Regional models. It is found that an inappropriate use of international trades treatment models may produce very inaccurate estimations of numerical values of embodied energy. Three country groups has been identified, characterized by different ranges of fractions of imported/exported primary fossil fuels: Single-Region method A returns best results for countries of Group 1, with high values of fossil exports and low values of fossil imports; Multi-Regional method C is to be preferred for countries of Group 2, with high values of fossil imports and low values of fossil exports; finally, Single-Region method B returns lower deviations compared to other methods for countries of group 3, with low values of fossil imports and exports.This paper aims at supporting researchers in the field of Life Cycle Assessment in the application of Environmentally extended Input-Output analysis, finding the best trade-off between the efforts due to data collection and the accuracy of results.