Process System Modelling of Production Technology Alternatives using Input–Output Tables with Sector Specific Units

Abstract

Input–output analysis is usually based on tables of accounts expressed in uniformmonetary or physical units. However, from a process system modelling perspective,tables of accounts in sector specific units may be more useful for evaluating theeffectiveness of new production technologies on reducing pollutant emissions. Usingthe sector specific unit conceptualization of an IO table, one can consider the effectof changes in direct input coefficients for a particular sector on the complete set oftotal input coefficients independently from the other direct input coefficients. Aprocess system modelling based method for calculating the total industrial outputsfrom a new technology matrix together with the new relative prices for each sectoroutput is presented. The method is then used to study the effect of technologychanges in the steel making industry in Liaoning Province, China on prices andpollutant emissions.