EIOLCA

EIOLCA

Economic input-output life cycle assessment, or EIO-LCA involves use of aggregate sector-level data quantifying how much environmental impact can be directly attributed to each sector of the economy and how much each sector purchases from other sectors in producing its output. Combining such data sets can enable accounting for long chains (for example, building an automobile requires energy, but producing energy requires vehicles, and building those vehicles requires energy, etc.), which somewhat alleviates the scoping problem of traditional LCA. EIO-LCA analysis traces out the various economic transactions, resource requirements and environmental emissions (including all the various manufacturing, transportation, mining and related requirements) required for producing a particular product or service.

EIO-LCA relies on sector-level averages that may or may not be representative of the specific subset of the sector relevant to a particular product. To the extent that the good or service of interest is representative of a sector, EIOLCA can provide very fast estimates of full supply chain implications for that good or service. The [http://www.eiolca.net eiolca.net] website is a freely available software implementation of EIOLCA.

Background

Economic input-output analysis was developed by Wassily Leontief (who won a Nobel Prize in 1973). It quantifies the interrelationships among sectors of an economic system, enabling identification of direct and indirect economic inputs of purchases. This concept was extended by including data about environmental and energy analysis from each sector to account for supply chain environmental implications of economic activity. [Hendrickson, C. T., Lave, L. B., and Matthews, H. S. (2005) "Environmental Life Cycle Assessment of Goods and Services: An Input-Output Approach", Resources for the Future Press]

Theory

Input-output transactions tables, which track flows of purchases between sectors, are collected by the federal government in the United States. EIO works as follows: If X_{ij} represents the amount that sector j purchased from sector i in a given year and y_i is the "final demand" for output from sector i (i.e., the amount of output purchased for consumption, as opposed to purchased by other businesses as supplies for more production), then the total output x_i from sector i includes output to consumers plus output sold to other sectors:

x_i = y_i + sum_jX_{ij}

If we define A_{ij} as the normalized production for each sector, so that A_{ij} = X_{ij}/x_j, then

x_i = y_i + sum_jA_{ij}x_j

In vector notation

mathbf{x} = mathbf{y} + mathbf{Ax}

mathbf{y} = (mathbf{I - A})mathbf{x}

mathbf{x} = (mathbf{I - A})^{-1}mathbf{y}

This result indicates that knowing only the final demand from each sector mathbf{y} and the normalized IO matrix mathbf{A}, one can calculate the total implied production mathbf{x} from each sector of the economy. If data are available on a particular emissions release (or other attribute of interest) from each sector of the economy, then a matrix mathbf{R} can be compiled to represent various releases (columns) per $ output from each sector (rows). Total additional emissions Delta mathbf{b} associated with additional final demand of Delta mathbf{y} can then be calculated as:

Deltamathbf{b} = mathbf{R}^TDeltamathbf{x} = mathbf{R}^T(mathbf{I - A})^{-1}Deltamathbf{y}

This simple result enables very quick analysis, taking into account releases associated with the entire supply chain requirements needed to provide a specific final demand, on average. The equations are based on average data in the current economy, but they can be used to make predictions for marginal changes in output (such as one more unit of a particular product) if
# average output and marginal output are assumed to be sufficiently close (i.e., the impact of "one more unit" = the impact of "the average unit"), and
# the marginal change in final output Delta mathbf{y} is representative of the product of interest (ex: if the product will use electricity from wind energy exclusively, then using the electricity sector, which is dominated by coal, would yield a poor estimate).

Finally, if the researcher has estimates for valuation of externality costs associated with each item in mathbf{b} (or, alternatively, if weighting coefficients are available that represent the relative importance of each item in mathbf{b}, using ecological indicators, for example) then the externality costs (or weights) per unit of releases could be compiled into a vector mathbf{m} in order to calculate the scalar "environmental impact metric" m:

Delta m = mathbf{m}^TDeltamathbf{b} = mathbf{m}^Tmathbf{R}^TDeltamathbf{x} = mathbf{m}^Tmathbf{R}^T(mathbf{I - A})^{-1}Deltamathbf{y}

Generally there is wide uncertainty associated with estimates of mathbf{m}, so such aggregation should be done only with care, including sensitivity analysis. Typically, researchers examine specific elements of mathbf{b} rather than attempting to aggregate.

The big picture result is that by collecting data on average economic sector transactions mathbf{A} and average sector emissions mathbf{R}, it is possible to make quick predictions about the full supply chain emissions associated with a product of interest by representing the product as marginal changes in production from relevant sectors mathbf{y}.

oftware

The Economic Input Output-Life Cycle Assessment software, available at [http://www.eiolca.net] , traces out the various economic transactions, resource requirements and environmental emissions associated with the production of a particular product or service. The model captures all the various manufacturing, transportation, mining and related requirements to produce a product or service. For example, you might wish to trace out the implications of purchasing $ 46,000 of reinforcing steel and $ 104,000 of concrete for a kilometer of roadway pavement. Environmental implications of these purchases can be estimated using EIO-LCA. The current (1997) model is based upon the Department of Commerce's 491 sector industry input-output model of the US economy.

"This article uses text from [http://ddl.me.cmu.edu/ddwiki/index.php/EIO-LCA Design Decisions Wiki] under the GFDL."

References

External links

* [http://www.eiolca.net EIOLCA Software]


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