Handbook of Input-Output Economics in Industrial Ecology ECO-EFFICIENCY IN INDUSTRY AND SCIENCE VOLUME23 SeriesEditor:ArnoldTukker,TNO,Delft,TheNetherlands EditorialAdvisoryBoard: Martin Charter, Centre for Sustainable Design, The Surrey Institute of Art & Design, Farnham,UnitedKingdom JohnEhrenfeld,InternationalSocietyforIndustrialEcology,NewHaven,U.S.A. GjaltHuppes,CentreofEnvironmentalScience,LeidenUniversity,Leiden,TheNetherlands Reid Lifset, Yale University School of Forestry and Environmental Studies, New Haven, U.S.A. TheodeBruijn,CenterforCleanTechnologyandEnvironmentalPolicy(CSTM),University ofTwente,Enschede,TheNetherlands Forothertitlespublishedinthisseries,goto www.springer.com/series/5887 Handbook of Input-Output Economics in Industrial Ecology Edited by Sangwon Suh UniversityofMinnesota 123 Editor SangwonSuh UniversityofMinnesota DepartmentofBioproductsandBiosystemsEngineering 1390EcklesAvenue SaintPaul,MN55108-6005 U.S.A. ISSN1389-6970 ISBN978-1-4020-4083-2 e-ISBN978-1-4020-5737-3 DOI10.1007/978-1-4020-5737-3 SpringerDordrechtHeidelbergLondonNewYork LibraryofCongressControlNumber:2009926506 (cid:2)cSpringerScience+BusinessMediaB.V.2009 Nopartofthisworkmaybereproduced,storedinaretrievalsystem,ortransmittedinanyformorby anymeans,electronic,mechanical,photocopying,microfilming,recordingorotherwise,withoutwritten permissionfromthePublisher,withtheexceptionofanymaterialsuppliedspecificallyforthepurpose ofbeingenteredandexecutedonacomputersystem,forexclusiveusebythepurchaserofthework. CoverphotographybyJaeK.ChoiandSangwonSuh Printedonacid-freepaper SpringerispartofSpringerScience+BusinessMedia(www.springer.com) Preface From the early 2000s, the members of the Society for Environmental Toxicology andChemistry(SETAC)-Europenoticedthattheywerehearingmoreoftenduring theirannualmeetingsaboutsomethingcalledinput-outputeconomics.TheSETAC- EuropehadbeenthecradleofLifeCycleAssessment(LCA)methodology,andits members were mainly engineers and natural scientists. For many of them, input- output economics was an area that was greatly interesting and equally foreign. About the same time, the members of the International Input-Output Association (IIOA)couldnotmissthatasubstantialnumberofthepresentationsoftheirbian- nualmeetingswerethemedaroundtheenvironmentandsustainability.Thiswasthe timewhennewsessionsonLCAandIndustrialEcologystartedtobeorganizeddur- ingIIOAmeetings.ItwasalsothetimethattheInternationalSocietyforIndustrial Ecology(ISIE)tookoff,providingahomeformanywhowereworkingbetweenthe interfacesoftraditionaldisciplines. In the course of these meetings, it became clear that LCA researchers, input- output economists, and industrial ecologists had a lot to learn and benefit from each other. At the same time, it was also clear that there were disciplinary barri- ershamperingeffectivecommunicationamongthesegroups.Acommonlanguage andplatformforcommunicationwasinneedamongthesegroupstomaterializethe benefits. Recognizing these needs, the LCA steering committee of SETAC-Europe, then chairedbyAngelinedeBeaufort,approvedanewSETAC-EuropeWorkingGroup (WG)onInput-OutputAnalysis(IOA)in2003,forwhichIservedasachairfor3 years.ThefirstmeetingoftheWGanditsfirstworkshopwasheldonMay1,2003in Hamburg,GermanyinvolvingaroundadozenSETAC-Europemembers.Itbecame evident during thefirstmeeting thatthe WGshouldreach outtoother societies to embracebroaderexpertiseinandaroundinput-outputeconomics.TheISIEandits executive director, John Ehrenfeld, recognized the WG and approved the second workshoptobeheldinconjunctionwithitsbiannualconferenceonJuly2,2003in AnnArbor,MI,USA,whereover70participantsweregathered.TheWGcontinued tomeetinPrague,CzechRepublicandinStockholm,Sweden,whichservedasan importantinternationalplatformforexchangingknowledgeandexperienceamong researchersfromvariousbackgrounds. v vi Preface Thishandbookisaresultofthemultipleyearsofeffortsrootedfromthesenumer- ousworkshopsandmeetings.Itcontainscontributionsfromaround70authorsfrom 19countries embracing thestate-of-the-arttheoryand principlesaswellaspracti- calapplicationsofinput-outputeconomicsforansweringthequestionsinindustrial ecology.Thegroupofauthorswithinthishandbookrepresentsawidespectrumof expertisefromacademia,nationallaboratories,statisticaloffices,andresearchinsti- tutes,andcontributorsincludethescholarsholdingeditorialresponsibilitiesofkey journals of the field, such as the Journal of Industrial Ecology, Economic System Research, and International Journal of Life Cycle Assessment, as well as the past andthecurrentleadersofvariousprofessionalsocieties. The handbook covers an array of topics including the history of industrial ecologyandinput-outputeconomics,materialflowanalysis,LCA,sustainablecon- sumption, policy applications, energy and climate change, waste management, national accounts and statistics, and new developments in modeling and theory. Particularly,thishandbookisdesignedtoofferacomprehensivecoverageonthree major issues: (1) theory and method of key analytical tools and models; (2) fun- damental accounting principles and compilation of basic data; and (3) practical applicationsofthetoolsandmodelsatvariousscales.First,variousanalyticaltools and modeling techniques that are of particular importance to industrial ecology applications are comprehensively treated in this handbook, which includes hybrid modelsforLCA,MaterialFlowAnalysis(MFA)andenergyanalysis;physicaland hybrid-unit IO models; Waste IO model; multi-regional IO models; dynamic IO model;thermodynamicanalysis;linearprogrammingandoptimizationtechniques; graphtheoryandnetworkanalysis;useofscenarios;andStructuralDecomposition Analysis(SDA).Second,basicaccountingframeworksandcompilationofrequired datafortheseanalyticaltoolsandmodelsareshown,whichcoverse.g.,thesupply- use framework, resources accounts, time-use survey, Social Accounting Matrices (SAMs),compilationofenvironmentalIOdatabasesofJapan(3EID)andtheU.S. (CEDA). Third, use of these data, tools and models for micro-, meso-, as well as macro-scale applications are presented throughout the chapters. Readers will also notice the difference in mode of writing in some chapters: for instance, some are writtenmoreasapracticalandinstructiveguide(e.g.,thestep-by-stepapproaches for net energy analysis of Chapter 24) and some are done more as a theoretical contribution(e.g.,themultistageprocess-basedmake-usesystemofChapter35). Eachofthe38chaptersofthishandbookisself-contained,whilesomechapters provide boxes to explain some of the basics, which can be referenced across the chapters.Theboxeslike“GeneralaccountingstructureofaPhysicalInput-Output Table” (Chapter 4) and “Taxes in Input-Output Tables” (Chapter 18) are good ex- amples. Balancing geographical and disciplinary coverage with the depth of the contributionswasanimportantconsiderationindesigningthehandbookaswell,so that it can serve a wide range of audiences with different knowledge levels, disci- plinarybackgroundsandgeographicallocations.Asaconsequence,somechapters mayservetheneedsofaparticulargroupofaudiencesbetterthanothers. This handbook could not have been produced without the help and support of many. I thank Angeline de Beaufort, John Ehrenfeld, and Faye Duchin for their Preface vii generoussupportstothisinitiative.IthankthemembersoftheSETAC-EuropeLCA steeringcommittee,andthecouncilsoftheISIEandIIOAfortheirsupportinorga- nizing some of the early meetings. I thank Helias Udo de Haes, Gjalt Huppes and my colleagues at the Institute of Environmental Sciences (CML) for their encour- agementandsupportduringtheearlystageoftheinitiative.IthankScottMatthews, Chris Hendrickson and other colleagues at the Department of Civil and Environ- mental Engineering at Carnegie Mellon University (CMU) for their support while IwasworkingatCMU.IthankShriRamaswamyattheDepartmentofBioproducts andBiosystemsEngineeringoftheUniversityofMinnesota(UMN)forhissupport tothiswork.Inthecourseofitsevolution,thishandbookhasbeeninthehandsof four publisher-editors: Henny A.M.P Hoogervorst, Esther Verdries, Fabio de Cas- tro, and Fritz Schmuhl. I thank all of them for their patience and excellence. I am gratefultotheserieseditor,ArnoldTukkerforhisvaluableadvices.Theassistants fromthemembersoftheIndustrialEcologyLabattheUniversityofMinnesotawere invaluable. I thank Junghan Bae, Ryan Barker, Yiwen Chiu, Amber Illies, Jinseon Park,BrianRamackel,KyoSuh,BrianWalseth,andYangYifortheirhelp.Last,but notleast,Ithankalltheauthorsfortheirvaluablecontributions,patienceandfaith. Forsomechapters,therewerearealeaderswhogreatlyhelpedstructurethishand- book and facilitate peer-reviews. I thank area leaders Susanne Kytzia (PART II), AnnemarthIdenburg(PARTV),ManfredLenzen(PARTVI),ShinichiroNakamura (PARTVII),andReidBailey(PARTIX)fortheirleadership. Havinggonethroughalongjourney,thisvolumecamenotwithoutregrets.Keep- ingtrackofalargenumberofmanuscripts,peer-reviews,andrevisionswasnotan easy task, and given the large number of authors involved, human factors should have been better incorporated in planning and scheduling each step. At the begin- ning, it was the intention to assign each alphabet to note a particular matrix in input-output economics, like V for supply matrix, for instance, and use it consis- tently throughout the handbook. After spending quite some time juggling around thelettersoverseveralchapters,Irealizedthatthereareonly26lettersinthealpha- bet, while innovativeness of the authors knows no limit.While this handbook was beingshaped,mycareerhadtospanoverthreeinstitutesacrosstheAtlantic,andat timesotherdutiesandcommitmentsinterruptedtheeditingprocess,sometimesfor anextendedperiod.Iwouldliketooffermysincereapologiesforthosewhohave beenawaitingthishandbookforalongtime. Iwishthatthishandbookservesasaone-stopreferencebookforbothindustrial ecologistsandinput-outputeconomistswhoareexploringtheotherdiscipline.Ibe- lievethatthishandbookisausefulguidancealsoforthosewhostudyLCA,energy andclimatechangepolicy,environmentalproductpolicyandsustainableconsump- tion.Iwishthatthereadersfindthishandbookavaluablecompanionintheirjourney acrossdisciplines. October2008,Twincities S.Suh Contents Preface............................................................................. v Contributors...................................................................... xv ListofFigures .................................................................... xxi ListofTables......................................................................xxvii ListofBoxes ......................................................................xxxv PartI Introduction 1 IndustrialEcologyintheAgeofInput-OutputAnalysis................ 3 ReidLifset 2 Input-OutputEconomicsandMaterialFlows............................ 23 FayeDuchin 3 IndustrialEcologyandInput-OutputEconomics:ABrief History........................................................................ 43 SangwonSuhandShigemiKagawa PartII MaterialFlowAnalysis 4 Conceptual Foundations and Applications of Physical Input-OutputTables ........................................................ 61 StefanGiljumandKlausHubacek 5 ModellingManufactured CapitalStocksandMaterial FlowsintheAustralianStocksandFlowsFramework.................. 77 JamesA.LennoxandGrahamM.Turner ix x Contents 6 AnInput-OutputFrameworktoEnhanceConsistency inHybridModeling ......................................................... 99 SusanneKytzia 7 PhysicalInput-OutputAnalysisandDisposalstoNature............... 123 Erik Dietzenbacher, Stefan Giljum, Klaus Hubacek, andSangwonSuh 8 AccountingandModellingGlobalResourceUse ........................ 139 Stefan Giljum, Friedrich Hinterberger, Christian Lutz, andBerndMeyer 9 ConstructingPhysicalInput-OutputTableswithMaterial FlowAnalysis(MFA)Data:Bottom-UpCaseStudies................... 161 OttiliaDeMarco,GiovanniLagioia,VeraAmicarelli, andAntonellaSgaramella 10 AnalysingtheEconomicImpactsofaMaterialEfficiency Strategy....................................................................... 189 CarstenNathani PartIII LifeCycleAssessment 11 AComparisonBetweenConventionalLCAandHybrid EIO-LCA: Analyzing Crystal Giftware Contribution toGlobalWarmingPotential............................................... 219 PauloFerra˜oandJorgeNhambiu 12 ApplicationoftheSequentialInterindustryModel(SIM) toLifeCycleAssessment.................................................... 231 StephenH.Levine,ThomasP.Gloria,andEliahuRomanoff 13 Life-Cycle Assessment (LCA) as a Management Tool: AnEmphasisonElectricityGeneration,GlobalClimate Change,andSustainability................................................. 247 SergioPacca 14 MethodsintheLifeCycleInventoryofaProduct....................... 263 SangwonSuhandGjaltHuppes PartIV SustainableConsumption 15 Principal Methodological Approaches to Studying SustainableConsumption:ScenarioAnalysis,Ecological FootprintsandStructuralDecompositionAnalysis ..................... 285 RichardWoodandManfredLenzen