Multi-regional Input-output Framework Research Articles

Economic and environmental impacts of the shifts to electromobility in Spain: A multiregional input–output framework

AbstractThe decarbonization of transport is a key goal facing climate change. The electrification of the powertrain for passenger cars is part of this goal to reduce carbon emissions. This involves a big change in the global supply chain, specifically in countries with a high weight of the traditional automotive sector, such as Spain, where above 10% of the GDP comes from this industry. There is a forecasted shift from the sector of traditional automotive parts to the electric sector, where batteries and electric components will be the major part of the powertrain. This work evaluates socioeconomic and environmental impacts of the changes in the car industry from the ramp‐up of the electric vehicles market in Spain, and also in the European Union and the rest of the world. To do it, we use an environmentally extended multiregional and multi‐sectoral input–output model. Our simulations include the technological change and demand shifts estimated to achieve the penetration of electric vehicles up to 2030 and 2050. The results show significant impacts on employment and economic indicators by 2050, when the share of electric vehicles is expected to increase up to a relevant level.

Water-land-energy efficiency and nexus within global agricultural trade during 1995–2019

Agricultural product demand driven by population and economic growth poses challenges to water, land, and energy utilization, and this increasing local demand is largely met through trade. However, the efficiency and nexus pattern of the water, land, and energy embodied in agricultural trade are not well understood. This study uses the multi-regional input–output framework to analyze agricultural water, land, and energy utilization efficiency of resource footprints per unit economic output as well as their transfer and nexus pattern in global agricultural trade for 1995–2019. The results show that many international agricultural trade paths are inefficient in the water, land, and energy resource use because the agricultural products in these paths are exported from relatively low- to high-efficiency economies/regions. However, these inefficient transfer paths show an increasing trend over the study period. Regarding the water-land-energy nexus, conflicts are prevalent in land-energy and water-energy couplings. Most trade paths are conducted to alleviate the pressure on a specific resource, inadvertently increasing the pressure on other resources. Although agricultural trade is important for meeting global food demands, it is not consistently beneficial to the local environment when considering agricultural resources use efficiency. This study is expected to improve our understanding of agricultural trade impacts to the agricultural resources and support the sustainable development of global agriculture.

Job creation and decarbonization synergies in Latin America: a simulation-based exploratory modeling analysis

This study employs an Input–Output simulation model to assess the potential employment effects resulting from investments in 40 sector-specific decarbonization transformations across Latin America and the Caribbean. Using a Multi-region Input–Output framework (Eora26), our findings indicate that investments in energy production and buildings sectors offer promising job creation opportunities, averaging 5.5 total jobs per $1 million invested. Similarly, in the waste, industry and agriculture, forestry, and land use sectors demonstrate significant potential, yielding approximately 5 total jobs per $1 million. The analysis models investments as demand vectors, producing results for 17 countries in the region. These estimates endogenize the diverse economic structure and state of development of these countries. We argue that country-level analysis is needed to identify climate strategies that maximize job creation while achieving net-zero emissions.

CO2 emissions and global value chains indicators:new evidence for 1995–2018

Globalization and the configuration of production processes around Global Value Chains (GVCs) have become key factors for explaining the recent evolution of environmental and economic indicators. Indeed, previous research found evidence on the significant impact of GVCs indicators (participation and position) on CO2 emissions. Additionally, results obtained in previous literature vary depending on the time period and geographical areas considered. In this context, the main aims of this paper are to analyze the role the GVCs in explaining the evolution of CO2 emissions, and to identify possible structural breaks. This study uses the Multiregional Input-Output framework to calculate a position indicator and two different measures of participation in GVCs (interpreted either as trade openness or international competitiveness). The analysis useS Inter-Country Input-Output tables (ICIO) as main database, which includes 66 countries and 45 industries and covers the period 1995–2018. It is first concluded that upstream positions in GVCs are associated to lower global emissions. Additionally, the effect of participation depends on the measure used: trade openness is linked to lower emissions, while a higher competitiveness in international trade leads to higher emissions. Finally, two structural breaks are identified in 2002 and 2008, revealing that position is significant in the two first subperiods, while participation becomes significant from 2002 onwards. Thus, policies to mitigate CO2 emissions might to be different before and after 2008: currently, reductions in emissions can be achieved by increasing value-added embodied in trade while decreasing the volume of transactions.

China’s domestic industry redistribution facilitates carbon emissions mitigation

Industry redistribution is a common economic phenomenon that involves a dynamic configuration of the production location across a region, country, or the world. However, measurements of the associated pollutant emission effects have not been well conducted at the domestically regional level. Here, we calculate the CO2 emission changes induced by China's domestic inter-provincial industry redistribution during 2002-2017 using a counterfactual approach in the multi-regional input-output framework. We find that China's domestic industry redistribution decreased CO2 emissions during 2002-2017 and has considerable potential to continuously mitigate CO2 emissions in the future. We emphasize that the pollution haven effect may accompany the process of industry redistribution but can be weakened by effective policies, including stringent access thresholds in the regions undertaking industry relocation and regional industry structural upgrading. This paper provides policy recommendations for strengthening regional coordination to achieve China's transformation to carbon neutrality.

Decomposition analysis of aggregate embodied CO2 intensities in import products of the construction industry from the perspective of border-crossing frequency

Sustainable development of the construction industry requires balancing economic growth and resulting environmental impacts. The aggregate embodied CO2 intensity (CI), defined as the ratio of embodied CO2 emissions per embodied value added, has been studied in previous research to evaluate the environment performance and mitigation policies from a final demand perspective. However, there is a relative lack of studies analysing CI from the perspective of border-crossing frequency (BCF), the number of national border crossings of traded products. This paper first analyses the CI in import products of the construction industry at each BCF under a multi-regional input–output framework and decomposes the change in CI in import products into the value-added distribution factor and the efficiency factor under conditions of BCF. The results indicate that CIs in import products of construction industries experienced declines from 2000 to 2014. The value-added distribution factor appeared to have an inhibitory effect only at the first BCF on the growth in CIs in import products of construction industries and prompted growth in CIs in import products at higher-order BCFs. The efficiency factor had a significant promoting effect on the decline in CIs in import products of construction industries but this promotion effect became weaker with an increase in the level of BCF. The reduction effect of the value-added distribution factor on the changes in CIs in import products of construction industries was smaller than that of the efficiency factor, indicating that the decrease in the CI was largely determined by the improvement in environmental efficiency at each BCF. Driving force analysis of the change in CI in import products of the construction industry from the perspective of BCF can effectively help in adjusting the import structure in order to control the growth of CI in import products.

Unequal household carbon footprints in the peak-and-decline pattern of U.S. greenhouse gas emissions

Greenhouse gas (GHG) emissions in the U.S. peaked and declined in the first decade of the 21st century, largely attributed to the increased use of natural gas and renewable energy replacing coal. However, if and to what extent household consumption also played a role in this trend is still debated. Finding demand-side options is necessary to hedge against the risks of technology solutions failing to materialize. To fill this gap, this study analyzes the change in GHG emissions driven by U.S. household consumption, explores the drivers of this change and the contribution of different income groups. To this end, this study combined the U.S. consumer expenditure survey with an environmentally-extended multi-regional input-output framework to analyze changes in GHG emissions induced by household consumption between 2001 and 2015. This study further analyzed how much population, consumption volume and consumption patterns drove emission changes by quintile income groups. The results show that changes in household consumption contributed approximately one-third of the national emission decline. The decline in GHG emissions from U.S. households was mainly associated with a decrease in the consumption of carbon-intensive products, including gasoline, electricity, and animal-based food products. The top quintile income households were the main contributors to the emission increase before the peak, while the third and fourth income quintiles became emission mitigation leaders after 2010. Carbon inequality increased during the 2001–2006 period, mainly driven by increased wealth and consumption of high-income households, and was relatively stable after the peak. Emissions from certain consumption categories of the top quintile group are significantly higher than the bottom four quintiles with increasing trends, especially leisure-related services and goods, which require more attention in future policymaking for emission reduction.

Exploring carbon rebound effects in Chinese households’ consumption: A simulation analysis based on a multi-regional input–output framework

Improving energy efficiency is considered to be essential to carbon emission reduction. However, it may not be as effective as expected due to the rebound effect. This paper attempts to investigate the carbon rebound effects and rebound risks in households. For this purpose, a comprehensive analysis framework incorporating elastic estimates, environmentally extended multi-regional input–output model and re-spending model, were built. Three rebound risk indicators were then constructed, following which a simulation of direct and indirect carbon rebound effects was conducted for urban households in China. By comparing the estimation results of the four re-spending scenarios, we found these households’ carbon rebound effect to be significant. The empirical results further indicate significant differences in the rebound risk among different provinces. Overall, Xinjiang, Qinghai and Ningxia are the provinces most vulnerable to the rebound effect. These findings point to the necessity of the government adopting other measures besides energy efficiency policies, with regional differences taken into account, in order to curb the carbon rebound effect.

From globalization to regionalization? Assessing its potential environmental and economic effects

There are increasing warns of the withering of globalization but the rise of regionalization. In this paper, we provide a quantifiable definition for regionalization in a global multi-regional input–output framework and set different scenarios of regionalization to simulate their potential effects on the environment and economy. Our results show that the “North America-Europe-Asia” tripartite regionalization would reduce the CO2 emissions in Asia (China in particular) and Europe, but increase substantial emissions in North America, leading to a slight reduction in global CO2 emissions. However, it would cause large value-added losses for some developing countries such as China, India, and Vietnam but bring value-added gains for some developed countries, enlarging the economic gap between developing and developed nations. In terms of industries, the regionalization of technology-intensive supply chains would have larger effects than other industries. Moreover, we present the results for several different scenarios of partial regionalization, which we set for capturing some more realistic regionalization cases in the future world.

The geographical and sectoral concentration of global supply chains

ABSTRACT Due to international fragmentation, production increasingly occurs in global supply chains (GSC). The common belief is that this leads to more specialization, which implies more concentration of imports and exports over time. In this paper, we empirically test this hypothesis by analysing the geographical and sectoral concentration of GSC over the period 1995–2011. We adapt the traditional Herfindahl’s concentration indexes to a multi-regional input–output framework. Taking the information on intersectoral and interregional linkages into full account gives the concentration indexes of GSC. The indexes are at different aggregation levels, which enables us to examine both geographical and sectoral concentration patterns. After that, we analyse the effect a country’s geographical and sectoral concentration on its gross domestic product (GDP) per capita. Our findings are: an increase of geographical and sectoral concentration of GSC from 1995 to 2011; a growing role in global production chains played by China and other Asian countries; less concentration for European Union countries; a significant positive effect of geographical concentration on GDP per capita; and a significant negative effect of sectoral concentration.

Shared and environmentally just responsibility for global biodiversity loss

Human land use is the main driver of terrestrial biodiversity loss. It has been argued that producers and consumers have a shared responsibility for biodiversity loss because this land use is directly and indirectly driven by the local and global demand for products. Such responsibility sharing would be an important step for global biodiversity cooperation and conservation. Here, we use a global multiregional input-output framework to estimate consumption-based biodiversity loss, integrating with both the physical Food and Agriculture Biomass Input-Output (FABIO) dataset and a global monetary input-output table (EXIOBASE). We use an environmental justice framework for assigning biodiversity loss responsibility between producers and consumers. In this framework, we employ the Human Development Index (HDI) as a proxy of the weighting parameter for both producers and consumers. An environmental justice perspective may provide a fairer distribution of responsibility in a world where different nations have very different capabilities and see varying benefits from international trade. Environmentally just accounting increases the footprint of the Global North compared to other common approaches for sharing responsibility across all producers and consumers along international supply chains. We describe how environmental justice may inform cooperation in biodiversity protection between stakeholders along global supply chains.

Analysis of Labor Embodied in China’s Inter-regional Trade in Value-Added: Re-Examination of Leontief’s Paradox from the Perspective of Energy Use

Based on the multi-regional input-output framework, this paper analyzed the labor and energy transfer embodied in interregional trade in China. Meanwhile, through estimating the energy intensity per unit of labor embodied in final products in each region, this study examines whether the empirical results are consistent with the theoretical hypothesis and provides relevant explanations and industrial development suggestions. Results show that east coastal region and central region are the two main participants in interregional trade. As for the labor embodied in trade, east coastal region is the largest exporter of embodied labor, though it has the highest wage among eight regions; in contrast, north coastal and southwestern region, with relatively low wage, are the two largest importer of embodied labor. As for the energy embodied in trade, northwestern region is the largest exporter of embodied energy. Further analysis indicates that the energy intensity per unit of labor in region with relatively low GRP (such as northwestern region) is the highest, whereas those in Beijing-Tianjin Region and south coastal region (with relatively high GRP) are the lowest. By analyzing the Revealed Comparative Advantage in each region, the paper finds that the main reason for this inconsistency lies in the industrial structure in northwestern and north coastal region, which are highly dependent in primary industries. Improving the infrastructure and upgrading industrial structure are important steps for these regions to transform the extensive growth mode.

The forestry products value chain and the costs of reshaping it: Multi-regional impacts of shrinking the pulp and paper industries in Portugal

Forestry industry macroeconomic assessments typically concentrate on the production, harvesting, and earliest processing of wood products, underestimating the full range of forests impacts in regional economies.
 This work proposes a broader concept – forestry products value chain – that ponders the contribution of the downstream activities relying (directly and indirectly) on Silviculture and Forestry products.
 The paper adopts a methodology based on a Multi-Regional Input-Output framework. We apply this approach to the Portuguese economy. Results clarify the role of eucalyptus in “Pulp”, “Paper and Cardboard” and “Paper and Cardboard Articles”. Finally, the projected wider macroeconomic consequences from a reduction of these productions is evaluated.

Economic modeling of national energy, water and air pollution nexus in China under changing climate conditions

Both energy production and consumption could simultaneously bring about local water scarcity and regional air emissions. Identifying energy-water-air pollution interactions caused by final demand of energy is essential for gaining potential synergies and avoiding unintended economic losses when designing sustainable energy development pathways. Given that, an energy-water-air pollution nexus (EWAN) model is developed to examine the energy-related water and air pollution embodied in household consumption at different income levels. Under multi-regional input-output framework, an optimized three-dimensional coupling (OTC) model for coordinated multi-resources development is proposed to obtain potential system benefits. It is found that to meet electricity demand, air pollution problems in northern provinces have aggravated, and water consumption in southern provinces has increased. Reduced electricity demand in rich regions has a greater impact on the gross domestic product (GDP). Moreover, most economic changes occur in the demand changes of the electricity self-sufficient provinces. The impact of electricity demand by households at different income levels on air emissions and water usage is highly heterogeneous. For specific province, interfering with the consumption demand of Inner Mongolia is not conducive to both the economic and environmental system benefits. Although Heilongjiang is not short of water resources, its power generation mode needs to be adjusted.

Assessment of the sustainability of Mexico green investments in the road to Paris

To meet the Paris Agreement, Mexico is committed to reduce unconditionally 25% of its greenhouse gases emissions for the year 2030. Since the strategy to achieve the mitigation goals needs an increase in renewable energy sources, Mexico’s national climate change policy package has already been launched, including the deployment of 13.5 GW of wind, 1 of biomass, 0.7 of geothermal, 1.75 of hydropower and 10.4 of solar energy in the period 2018–2030. However, these green investments planned are below the scenario proposed by IRENA compatible with the Paris Agreement. This paper assesses Mexico’s green investments for the period 2018–2030 in terms of value added, employment, materials, land use, water and CO2eq emissions in a multiregional input-output framework and compare the results with the IRENA proposal. These green investments are expected to account for nearly an increase of 1% both of GDP and employment in Mexico and an expected mitigation of around 63 Mt CO2eq, once the new facilities are fully deployed. Nevertheless, the deployment and operation and maintenance phases will increase the emissions (0.82%), the water and material footprint (0.19 and 0.9%, respectively) and the land use (0.19%) with a substantial share of the positive and negative effects leakaged outside.

Measurement of air-pollution inequality through a three-perspective accounting model

China is suffering from serious air pollution. Regional air quality varies significantly due to intensive inter-provincial trades, diversified resource endowments and complicated economic structures. This study breaks the limitations of measuring environmental inequality only from a single perspective and establishes a three-perspective atmospheric pollutant equivalents accounting model (or APE accounting model) for air-pollution inequality assessment under environmentally-extend multi-regional input-output framework. From three perspectives of local production (i.e. production-based), final demand (i.e. consumption-based) and primary supply (i.e. income-based), APE emissions, APE transfers and environmental Gini coefficient are investigated to exam emission responsibilities of various impact factors, evaluate the impacts of inter-provincial trades on pollutants transfers, and characterize regional emission inequalities at both provincial and sectoral levels. The results indicate that local emitters are merely parts of contributors to air pollution. Direct emitters like Hebei Province, primary suppliers like Inner Mongolia and final consumers like Shandong Province induce large amounts of air pollutants as embedded within various economic activities. Because of unequal supply-demand levels and complex exchange mechanisms, three-perspective APE emissions are significantly heterogeneous, especially in mining, construction, energy and material-transformation sectors. Particularly, inequality of the mining sector in embodied emissions has the highest environmental Gini coefficient (0.881). This model provides a framework to assess regional environmental inequality and its findings provide scientific bases for the formulation of desired regional air pollution control policies.

Economic damage and spillovers from a tropical cyclone

Abstract. Tropical cyclones cause widespread damage in specific regions as a result of high winds and flooding. Direct impacts on commercial property and infrastructure can lead to production shortfalls. Further losses can occur if business continuity is lost through disrupted supply of intermediate inputs from, or distribution to, other businesses. Given that producers in modern economies are strongly interconnected, initially localised production shortfalls can ripple through upstream supply-chain networks and severely affect regional and wider national economies. In this paper, we use a comprehensive, highly disaggregated and recent multi-region input–output framework to analyse the negative impacts of Tropical Cyclone Debbie, which battered the north-eastern Australian coast in March 2017. In particular, we show how industries and regions that were not directly affected by storm and flood damage suffered significant job and income losses throughout upstream supply chains. Our results indicate that the disaster resulted in the direct loss of about 4802 full-time-equivalent jobs and AUD 1544 million of value added, and an additional indirect loss of 3685 jobs and AUD 659 million of value added. The rapid and detailed assessment of the economic impact of disasters is made possible by the timely data provision and collaborative environment facilitated by the Australian Industrial Ecology Virtual Laboratory (IELab).

International trade and the distribution of economy-wide benefits from the disbursement of climate finance

ABSTRACTIn the framework of recent international climate negotiations, industrialized countries have committed to transfer at least USD 100 billion per year to developing countries from 2020. Climate finance has become the subject of an already extensive literature. However, the economic impact of the disbursement of climate finance and the role of international trade in its distribution globally have not been studied yet. This paper specifically estimates the geographical distribution of economic benefits for 17 mitigation and 9 adaptation options. We use a Global Multi-Regional Input-Output framework to track both domestic as well as spill-over effects of climate finance disbursements. The relevance of spill-overs is confirmed: on average, 29% of the economic benefits of climate actions flow to countries different from the recipient country (i.e. to the donors and third countries). But this percentage varies widely, between 11 and 61% depending on the type of climate action implemented as well as the recipient country. The findings are expected to be of interest for both recipient and donor countries as they provide guidance on how to maximize the economic co-benefits of climate finance.

From convergence to divergence? Some new insights into the evolution of the European Union

The promotion of economic, social, and territorial cohesion has been one of the main pillars of the construction of the European Union. This general principle has been manifest in the objectives of achieving a higher level of economic convergence, territorial competitiveness, and fostering employment creation in EU countries. The recent economic crisis has implied profound changes, not only in the path of growth but also in the structural and technological characteristics of EU countries, with these elements highly conditioning their inter-dependencies, economic outcomes, and convergence. This paper analyzes the role that the evolution of economic structures has played in the evolution of recent convergence in Europe expanding the traditional measures of economic convergence extended to a multi-regional input-output framework. Our study shows a trend towards convergence among EU countries and a significant breakpoint with the arrival of the economic crisis in 2008. Moreover, we observe a continuous change in the role of different components, raising the participation of trade (intra and extra European trade) in income for most of the countries and sectors analyzed. In addition, the different behavior of services, in particular, knowledge intensive services in the EU countries notably condition income generation in countries. Nevertheless, our results show that despite services economy explains significantly income growth in Europe over the period 2000–2014, income growth in Eastern Europe countries has notably relied on the positive reliance of manufacturing sectors (particularly medium and low technology sectors), and the expansion of conventional services, with a lower representativeness of the knowledge intensive sectors. Domestic and intra-EU markets are dominant, although also with an increasing share of extra-EU exports. The opposite can be said for central EU economies, which a smoother evolution over the period but a clear dominance of the knowledge intensive services and, in some cases, the high and medium-high technology industry.

Charting the Future of Life Cycle Sustainability Assessment: A Special Issue

Charting the Future of Life Cycle Sustainability Assessment: A Special Issue