How sustainable development goals have transformed our world? Evolution of the ecological networks of the Italian economy

Abstract

This article focuses on modelling the structure of the Italian economy and its evolution from 2015 to 2019 using Physical Input-Output tables to understand its functioning in terms of biophysical and monetary exchanges. We considered energy extracted from natural resources within the country and embodied energy from natural resources extracted abroad. The model includes final demand (government, household, and gross capital formation) as endogenous factors. The results show that Agriculture, Advanced Manufacturing, and Tertiary industry are the main sectors consuming energy when considering the direct energy required to produce one unit of economic output. However, when assessing embodied energy, Tertiary Industry emerges as the leading consumer of energy. The findings demonstrate how the services sectors are highly dependant on the flow of energy-intensive resources. Ecological Network Analysis (ENA) was applied to identify the main sectors driving the Italian economy and their ability to obtain energy inflows from other sectors. The study found that the Tertiary industry, Final demand, and Manufacturing sectors were the main drivers of the Italian economy and had a higher ability to obtain energy inflows. The results also showed that exploitative or control relations dominated interactions between different economic sectors. Our results highlight that the dematerialization process at national level comes at environmental costs elsewhere.