Advancements in environmentally extended multiregional input-output analysis: modeling drivers, pressures, and impacts

Abstract

We increasingly need to rely on demand side changes to complement technological improvements to mitigate environmental impacts such as global warming and loss of biodiversity. To do so we must better understand how different types of consumers vary in their impact on the environment and to understand the role of consumer behavior in impact mitigation. The drivers-pressures-states-impact-response (DPSIR) framework describes the interactions between the human and natural systems. As the pressures, states, and impacts components of DPSIR are used to inform environmental policy making, it is crucial to both accurately account for, and to understand the linkages between these components and the underlying drivers. This thesis contributes to better understating of drivers (D), pressures (P) and impacts (I). The first contribution is made by estimating how changes in household income affect greenhouse gas emissions across a range of regions (drivers). By linking a demand system to the multiregional input-output model EXIOBASE 3, results show that by 2030 changing consumer preferences triggered by changes in household income lead to a 1% decrease in global warming from greenhouse gas (GHG) emissions globally compared to static consumer preferences. The largest contributors to this relative decrease in emissions are developing regions driven by lower preference of certain emission intensive food products, while the income effect on emissions of developed regions remain relatively unchanged. However, large expected population and affluence increases in developing regions more than cancel out the small negative effect of a modified consumption structure. Secondly, accuracy of environmental footprint studies is improved by increasing the regional resolution in a multiregional input-output (MRIO) model (pressures). Using a regionally extended version of EXIOBASE with detailed land use extensions, results show that regional aggregation errors are introduced when countries are aggregated to rest-of-the-world regions in the MRIO. Aggregate land use embodied in imports of regions differs by up to 68%, while individual sector-level flows differ by up to 600% when using rest-of-the world regions compared to treating countries explicit. Finally, by linking biodiversity characterization factors of land use to the new EXIOBASE version, biodiversity footprints for numerous new regions are estimated (impacts). Biodiversity footprints have globally increased by 5-6% between 1995 and 2015. Countries rich in biodiversity, and not necessarily affluence, have the highest footprint per capita. However, looking at trends over time, a one percent increase in income leads to a more than one percent increase in biodiversity footprint across all consumption categories for the average consumer in the most affluent countries, while this is not found for developing countries. The subsequent discussion shows that the potential is large for extending on the work in this thesis by further developing the database for understanding how demand-side changes and consumer behavior can contribute to reaching environmental mitigation goals

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