Nandan U. Ukidwe

Resource intensities of chemical industry sectors in the United States via input-output network models

Abstract Transitioning to more sustainable operations is widely considered to be among the premier challenges facing the chemical industry today. The motivators for such change include an increasingly tightening regulatory regime, increased consumer awareness, and inclination of investors to consider risks associated with lendings to hazardous material industries. As an effort to become “greener”, chemical industries are making conscious efforts to reduce their resource intensities or footprints. Such efforts need to be supported by models that can quantify the broad economic and environmental implications of industrial decisions. This manuscript uses the recently developed Ecologically Based Life Cycle Assessment (EcoLCA) model of the United States economy to analyze resource intensities of chemical industry sectors, comparing them with each other and with other industry sectors. The raw numbers are normalized by national flows to gain insight into possible resource vulnerabilities of industrial sectors. These numbers are also aggregated based on their mass or exergy to reduce their dimensionality and permit easier interpretation. Ecological cumulative exergy consumption (ECEC) allows consideration of a wide variety of ecosystem goods and services, human resources and emissions and their impacts on a consistent basis, and is shown to provide unique insight in addition to conventional measures based on mass and Industrial cumulative exergy consumption (ICEC). Ratios of ECEC to money indicate the relative throughputs of natural to economic capital, and are used for investigating supply chains of selected sectors and identifying likely keystone sectors. The insights obtained by juxtaposing resource intensities of chemical industry sectors amongst themselves and with those of the rest of economy are used to identify opportunities for reducing resources intensities of chemical industry sectors that could enable improvement of their environmental sustainability.

Thermodynamic Input-Output Analysis of Economic and Ecological Systems

Ecological resources constitute the basic support system for all activity on earth. These resources include products such as air, water, minerals and crude oil and services such as carbon sequestration and pollution dissipation (Tilman et al. 2002; Daily 1997; Costanza et al. 1997; Odum 1996). However, traditional methods in engineering and economics often fail to account for the contribution of ecosystems despite their obvious importance. The focus of these methods tends to be on short-term economic objectives, while long-term sustainability issues get shortchanged. Such ignorance of ecosystems is widely believed to be one of the primary causes behind a significant and alarming deterioration of global ecological resources (WRI 2000; WWF 2000; UNEP 2002). To overcome the shortcomings of existing methods, and to make them ecologically more conscious, various techniques have been developed in recent years (Holliday et al. 2002). These techniques can be broadly divided into two categories, namely preference-based and biophysical methods. The preference-based methods use human valuation to account for ecosystem resources (AIChE 2004; Balmford et al. 2002; Bockstael et al. 2000; Costanza et al. 1997). These methods either use a single monetary unit to readily compare economic and ecological contributions, or use multi-criteria decision making to address trade-offs between indicators in completely different units. However, preference-based methods do not necessitate