Keiichiro Kanemoto

The material footprint of nations

Significance This original research paper addresses a key issue in sustainability science: How many and which natural resources are needed to sustain modern economies? Simple as it may seem, this question is far from trivial to answer and has indeed not been addressed satisfactorily in the scholarly literature. We use the most comprehensive and most highly resolved economic input–output framework of the world economy together with a detailed database of global material flows to calculate the full material requirements of all countries covering a period of two decades. Called the “material footprint,” this indicator provides a consumption perspective of resource use and new insights into the actual resource productivity of nations. Metrics on resource productivity currently used by governments suggest that some developed countries have increased the use of natural resources at a slower rate than economic growth (relative decoupling) or have even managed to use fewer resources over time (absolute decoupling). Using the material footprint (MF), a consumption-based indicator of resource use, we find the contrary: Achievements in decoupling in advanced economies are smaller than reported or even nonexistent. We present a time series analysis of the MF of 186 countries and identify material flows associated with global production and consumption networks in unprecedented specificity. By calculating raw material equivalents of international trade, we demonstrate that countries’ use of nondomestic resources is, on average, about threefold larger than the physical quantity of traded goods. As wealth grows, countries tend to reduce their domestic portion of materials extraction through international trade, whereas the overall mass of material consumption generally increases. With every 10% increase in gross domestic product, the average national MF increases by 6%. Our findings call into question the sole use of current resource productivity indicators in policy making and suggest the necessity of an additional focus on consumption-based accounting for natural resource use.

International trade drives biodiversity threats in developing nations.

Human activities are causing Earth’s sixth major extinction event—an accelerating decline of the world’s stocks of biological diversity at rates 100 to 1,000 times pre-human levels. Historically, low-impact intrusion into species habitats arose from local demands for food, fuel and living space. However, in today’s increasingly globalized economy, international trade chains accelerate habitat degradation far removed from the place of consumption. Although adverse effects of economic prosperity and economic inequality have been confirmed, the importance of international trade as a driver of threats to species is poorly understood. Here we show that a significant number of species are threatened as a result of international trade along complex routes, and that, in particular, consumers in developed countries cause threats to species through their demand of commodities that are ultimately produced in developing countries. We linked 25,000 Animalia species threat records from the International Union for Conservation of Nature Red List to more than 15,000 commodities produced in 187 countries and evaluated more than 5 billion supply chains in terms of their biodiversity impacts. Excluding invasive species, we found that 30% of global species threats are due to international trade. In many developed countries, the consumption of imported coffee, tea, sugar, textiles, fish and other manufactured items causes a biodiversity footprint that is larger abroad than at home. Our results emphasize the importance of examining biodiversity loss as a global systemic phenomenon, instead of looking at the degrading or polluting producers in isolation. We anticipate that our findings will facilitate better regulation, sustainable supply-chain certification and consumer product labelling.

BUILDING EORA: A GLOBAL MULTI-REGION INPUT–OUTPUT DATABASE AT HIGH COUNTRY AND SECTOR RESOLUTION

There are a number of initiatives aimed at compiling large-scale global multi-region input–output (MRIO) tables complemented with non-monetary information such as on resource flows and environmental burdens. Depending on purpose or application, MRIO construction and usage has been hampered by a lack of geographical and sectoral detail; at the time of writing, the most advanced initiatives opt for a breakdown into at most 129 regions and 120 sectors. Not all existing global MRIO frameworks feature continuous time series, margins and tax sheets, and information on reliability and uncertainty. Despite these potential limitations, constructing a large MRIO requires significant manual labour and many years of time. This paper describes the results from a project aimed at creating an MRIO account that represents all countries at a detailed sectoral level, allows continuous updating, provides information on data reliability, contains table sheets expressed in basic prices as well as all margins and taxes, and contains a historical time series. We achieve these goals through a high level of procedural standardisation, automation, and data organisation.

Mapping the Structure of the World Economy

We have developed a new series of environmentally extended multi-region input-output (MRIO) tables with applications in carbon, water, and ecological footprinting, and Life-Cycle Assessment, as well as trend and key driver analyses. Such applications have recently been at the forefront of global policy debates, such as about assigning responsibility for emissions embodied in internationally traded products. The new time series was constructed using advanced parallelized supercomputing resources, and significantly advances the previous state of art because of four innovations. First, it is available as a continuous 20-year time series of MRIO tables. Second, it distinguishes 187 individual countries comprising more than 15,000 industry sectors, and hence offers unsurpassed detail. Third, it provides information just 1-3 years delayed therefore significantly improving timeliness. Fourth, it presents MRIO elements with accompanying standard deviations in order to allow users to understand the reliability of data. These advances will lead to material improvements in the capability of applications that rely on input-output tables. The timeliness of information means that analyses are more relevant to current policy questions. The continuity of the time series enables the robust identification of key trends and drivers of global environmental change. The high country and sector detail drastically improves the resolution of Life-Cycle Assessments. Finally, the availability of information on uncertainty allows policy-makers to quantitatively judge the level of confidence that can be placed in the results of analyses.

Frameworks for Comparing Emissions Associated with Production, Consumption, And International Trade

While the problem of climate change is being perceived as increasingly urgent, decision-makers struggle to agree on the distribution of responsibility across countries. In particular, representatives from countries hosting emissions-intensive exporting industries have argued that the importers of emissions-intensive goods should bear the responsibility, and ensuing penalties. Indeed, international trade and carbon leakage appear to play an increasingly important role in the carbon emissions debate. However, definitions of quantities describing the embodiment of carbon emissions in internationally traded products, and their measurement, have to be sufficiently robust before being able to underpin global policy. In this paper we critically examine a number of emissions accounting concepts, examine whether the ensuing carbon balances are compatible with monetary trade balances, discuss their different interpretations, and highlight implications for policy. In particular, we compare the emissions embodied in bilateral trade (EEBT) method which considers total trade flows with domestic emission intensities, with the multi-regional input-output (MRIO) method which considers trade only into final consumption with global emission intensities. If consumption-based emissions of different countries were to be compared, we would suggest an MRIO approach because of the global emissions coverage inherent in this method. If trade-adjusted emission inventories were to be compared, we would suggest an EEBT approach due to the consistency with a monetary trade balance.

Global Supply Chains of Coltan

The spot price for tantalum, a metal used in high‐performance consumer electronics, spiked in 2000, triggering a boom in artisanal mining of surface deposits in the Democratic Republic of Congo (DRC). The profit from columbite‐tantalite ore, or coltan, is alleged to have funded militants during that countrys civil war. One warlord famously claimed that in 2000, coltan delivered a million dollars per month. While coltan mining was neither a necessary nor sufficient cause for the civil war, there is nevertheless a clear association between mining and conflict. In order to trace global flows of coltan out of the DRC, we used a high‐resolution multiregion input‐output (MRIO) table and a hybrid life cycle assessment (LCA) approach to trace exports through international supply chains in order to estimate a “coltan footprint” for various products. In this case study, our aim is to highlight the power and utility of hybrid LCA analysis using high‐resolution global MRIO accounts. We estimate which supply chains, nations, and consumer goods carry the largest loads of embodied coltan. This hybrid LCA case study provides estimates on illicit flows of coltan, estimates a coltan footprint of consumption, and highlights the advantages and challenges of using hybrid monetary‐physical input‐output/LCA approaches to study and quantify a negative social impact as an input to production. If successful, the hybrid LCA approach could be a useful and expedient measurement tool for understanding flows of conflict minerals embodied in supply chains.

Identifying species threat hotspots from global supply chains

Identifying hotspots of species threat has been a successful approach for setting conservation priorities. One important challenge in conservation is that, in many hotspots, export industries continue to drive overexploitation. Conservation measures must consider not just the point of impact, but also the consumer demand that ultimately drives resource use. To understand which species threat hotspots are driven by which consumers, we have developed a new approach to link a set of biodiversity footprint accounts to the hotspots of threatened species on the IUCN Red List of Threatened Species. The result is a map connecting consumption to spatially explicit hotspots driven by production on a global scale. Locating biodiversity threat hotspots driven by consumption of goods and services can help to connect conservationists, consumers, companies and governments in order to better target conservation actions.

The inequality footprints of nations: a novel approach to quantitative accounting of income inequality.

In this study we use economic input-output analysis to calculate the inequality footprint of nations. An inequality footprint shows the link that each countrys domestic economic activity has to income distribution elsewhere in the world. To this end we use employment and household income accounts for 187 countries and an historical time series dating back to 1990. Our results show that in 2010, most developed countries had an inequality footprint that was higher than their within-country inequality, meaning that in order to support domestic lifestyles, these countries source imports from more unequal economies. Amongst exceptions are the United States and United Kingdom, which placed them on a par with many developing countries. Russia has a high within-country inequality nevertheless it has the lowest inequality footprint in the world, which is because of its trade connections with the Commonwealth of Independent States and Europe. Our findings show that the commodities that are inequality-intensive, such as electronic components, chemicals, fertilizers, minerals, and agricultural products often originate in developing countries characterized by high levels of inequality. Consumption of these commodities may implicate within-country inequality in both developing and developed countries.

INVESTIGATING ALTERNATIVE APPROACHES TO HARMONISE MULTI-REGIONAL INPUT–OUTPUT DATA

Over recent years a small number of global multi-regional input–output (MRIO) databases were developed to describe the entire global economy at high sector detail. We investigate the differences that arise out of applying different construction procedures for two global MRIO databases: The EXIOBASE database, developed as part of the EU FP6 & 7 programs and the Eora database developed at the University of Sydney. The procedures used in EXIOBASE involve a high degree of interrogation and adjustment throughout the construction of the data set, whilst the Eora MRIO relies on single-step mathematical programming techniques and high-performance computing. We unravel the effect of the different approaches taken to develop the databases by undertaking a number of combinatorial experiments in which we exchange parts of the construction process between the EXIOBASE and Eora build pipelines. We conclude that Eoras highly automated data reconciliation approach produces MRIO databases that are of comparable quality to those constructed with EXIOBASEs multi-step approach. However, the reliability and robustness of the resulting MRIO database largely depend on the level of detail and reliability of the underlying raw data.

The Global MRIO Lab–charting the world economy

ABSTRACT We describe the creation of the Global Multi-Region Input–Output (MRIO) Lab, which is a cloud-computing platform offering a collaborative research environment through which participants can use each other’s resources to assemble their own individual MRIO versions. The Global MRIO Lab’s main purpose is to harness and focus previously disparate resources aimed at compiling large-scale MRIO databases that provide comprehensive representations of interregional trade, economic structure, industrial interdependence, as well as environmental and social impact. Based on the operational Australian Industrial Ecology Lab, a particularly important feature of this cloud environment is a highly detailed regional and sectoral taxonomy called the ‘root classification’. The purpose of this root is to serve as a feedstock from which researchers can choose any combination of regions and economic sectors to form a model of the economy that is suitable to address their particular research questions. Thus, the Global MRIO Lab concept enables enhanced flexibility in MRIO database construction whilst at the same time saving resources and avoiding duplication, by sharing time- and labour-intensive tasks amongst multiple research teams. We explain the concept, architecture, development and preliminary results of the Global MRIO Lab, and discuss its ability to continuously deliver some of the most prominent world MRIO databases.