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

Abstract

This paper offers a detailed review of recently described single- and multi-region input–output models used to assess environmental impacts of internationally traded goods and services. It is the second part of a two-part contribution. In Part 1 [Turner, K., Lenzen, M., Wiedmann, T. and Barrett, J. in press. Examining the Global Environmental Impact of Regional Consumption Activities — Part 1: A Technical Note on Combining Input–Output and Ecological Footprint Analysis; Ecological Economics.] we describe how to enumerate the resource and pollution content of inter-regional and inter-national trade flows with the aim to illustrate an ideal accounting and modelling framework for the estimation of Ecological Footprints. A large number of such environment-economic models have been described but only in the last few years models have emerged that use a more sophisticated multi-region, multi-sector input–output framework. This has been made possible through improvements in data availability and quality as well as computability. We identify six major models that employ multi-sector, multi-region input–output analysis in order to calculate environmental impacts embodied in international trade. Results from the reviewed studies demonstrate that it is important to explicitly consider the production recipe, land and energy use as well as emissions in a multi-region, multi-sector and multi-directional trade model with global coverage and detailed sector disaggregation. Only then reliable figures for indicators of impacts embodied in trade, such as the Ecological Footprint, can be derived.