Modeling reductions in the environmental footprints embodied in European Union's imports through source shifting

Abstract

The European Union (EU) is responsible for a disproportionately large share of global environmental footprints, in particular those embodied in trade through its imports. Import embodied footprints (IEFs) vary significantly depending on the country of origin, and therefore can be reduced through source shifting. We explore the impacts of shifting imports to the countries with lowest impact intensities per M€ according to four environmental pressures (carbon emissions, materials, water, and land), using Environmentally Extended Multi Regional Input-Output (EEMRIO) analysis. There are significant limitations of EEMRIO analysis (the price and product mix homogeneity assumptions), which we discuss in the paper. We find that a limited set of 13 products, among which food products and chemicals which are not elsewhere classified (n.e.c.), is responsible for more than half of all impacts embodied in imports for each pressure. Except for a few product groups, optimizing sourcing as to minimize impact for one pressure reduces impact in all others. The pressure exhibiting the highest scope for optimization is water. Carbon and material use optimization yields the largest reduction in other environmental pressures. We discuss increasing the policy relevance of EEMRIO in the case of IEFs by disaggregating n.e.c. product groups, and incorporating dynamic effects.