Robbie Andrew

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Approximation and Regional Aggregation in Multi-Regional Input–Output Analysis for National Carbon Footprint Accounting


Abstract

Multi-regional input–output (MRIO) analysis has been widely used to quantify the global environmental impacts (e.g. energy use, greenhouse gas emissions, water use) embodied in consumption and international trade. Often, analysts have used approximations to a full global MRIO model; however, without access to a full MRIO model the approximation errors are unknown.

In this paper we use an MRIO model based on the dataset provided by the Global Trade Analysis Project (GTAP) to quantify the errors introduced by various approximations of the full MRIO model. We find that emissions embodied in imports contribute an average 40% of the total emissions embodied in countries' final demands.

For the emissions embodied in imports, we find: (a) that the unidirectional trade model gives a good approximation to the full MRIO model when the number of regions in the model is small; (b) that including only the most important trade partner in terms of emissions embodied in imports can substantially improve the accuracy of estimates; and (c) that a world-average input–output table often provides a good representation of the aggregate ‘rest of world’ economy.

Finally, assuming that imports are produced with domestic technology (Domestic Technology Assumption, DTA) in an MRIO model can introduce significant errors and requires careful validation before results are used. However, the DTA generally produces better estimates than ignoring imports altogether.

A synthesis of carbon in international trade

In this comprehensive and up-to-date overview of the analysis of carbon embodied in international trade, Glen Peters and colleagues bring together treatments of some of the key issues, and introduce important new analyses. Learn more »

How to build an MRIOT from GTAP

Glen Peters and colleagues lay out clearly the method for constructing a multi-regional input-output table using the GTAP (Global Trade Analysis Project) database. Learn more »

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The two prevalent approaches to allocating responsibility for greenhouse gas emissions – production and consumption perspectives – push responsibility to either end of the supply chain. In this study, Robbie Andrew and Vicky Forgie present the first national-level application of the shared responsibility perspective. Learn more »


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