A Special Issue of the journal Economic Systems Research on ‘Carbon Footprint and Input-Output Analysis’ has recently been published, featuring six articles ranging from product, corporate and sector carbon footprinting to national and multi-national carbon accounting. The Special Issue brings together state-of-the-art research in environmental-economic modelling with the practice of greenhouse gas accounting at various levels. > Link to the Special Issue:
Recently, the idea of monitoring the carbon footprint of a nation as one option for climate policy has found its way into the legislative process in the UK. A Private Members Bill has been put forward in the House of Lords – the Bill seeks to put in place a consumer emissions target (the current UK Climate Change Act which sets an 80% reduction target only addresses production, i.e. territorial, emissions). Lord Teverson who initiated the bill said: “The Defra report considered the position in the United Kingdom in 2004 and came to the conclusion-I was surprised by the accuracy with which the figures can be worked out by academics-that the consumption emissions of the United Kingdom economy were some 37 per cent higher than our production emissions.”
Apart from the fact that this is the first such initiative to base a policy on consumption-based GHG accounting, the statement about the methodology also deserves attention. What is routine for the national carbon footprint analyst might be puzzling to others who are not involved in the calculations: How can one work out all the emissions created somewhere in the world associated with consumption activities in a completely different place?
The prevailing method for national Carbon Footprint accounting is environmentally extended multi-region input-output analysis (IOA). In such an environmental-economic model, national input-output tables, representing financial transactions between economic sectors within a country and greenhouse gas emissions data by sector are linked together in one coherent accounting framework with trade flow tables, showing the value of exports and imports by country and economic sectors. Thousands of analysts and researchers use analytical input-output techniques and countless scientific publications have impressively demonstrated the ability of IOA to support the quantification of environmental impacts of economic activities.
Despite a politically important and wide-ranging field of applications in carbon footprinting there is still not a widespread acknowledgment of the potential for (hybrid) input-output analysis in other areas. Examples are corporate footprinting which aims at capturing the economy-wide GHG impact of a company and product carbon footprinting aimed at summarising the life-cycle-wide GHG emissions of a specific commodity. One possible reason for this lack of recognition might be the relative initial complexity of implementing environmental input-output models. Specialist knowledge in economic and environmental theory and frameworks is required, the terminology might be more specialised and the input-output mechanism might be intuitively less accessible than the more practical mapping of process flows. Whether due to actual, practical problems or only perceived complexity, few practitioners have so far acquired the skills to carry out (hybrid) carbon footprint or life cycle assessments. However, once established, input-output models are easy to operate and require relatively little data input compared to bottom-up approaches.