The importance of raw material equivalents in economy-wide material flow accounting and its policy dimension

Abstract

► Material flow indicators, which exclude raw material equivalents, provide incorrect information for decision making. ► The Czech production system is highly dependent on metal ores from abroad. ► There is an unequal distribution of environmental pressures between the Czech Republic and its trading partners. ► Czech policies have so far not sufficiently addressed the two points above. ► Those two points can also hold for other developed industrial countries. This article presents a comparison of indicators based on an economy-wide material flow analysis, namely imports, exports, domestic material consumption, raw material equivalents of imports, raw material equivalents of exports and raw material consumption. These indicators were calculated for the Czech Republic for 1995–2010 using, besides an economy-wide material flow analysis, the hybrid input–output life cycle assessment method, which allows for a calculation of raw material equivalents of imports and exports. The results show that a calculation of indicators, which include raw material equivalents, is useful, as it provides some important information which is not obvious from imports, exports and domestic material consumption indicators. We have proved that the latter group of indicators provide the incorrect information regarding the environmental pressure trend related to material flows, underestimate the overall pressure related to foreign trade and provide incorrect information on the importance of various material categories in particular indicators. Consequently, in the case of the Czech Republic, the implications stemming from these points such as the very high dependency of the Czech production system on metal ores from abroad and a rather unequal distribution of environmental pressures between the Czech Republic and its trading partners have not been more thoroughly addressed by Czech economic, environmental and sustainability policies so far and present unresolved issues which will have to be dealt with in the future.