The CO2 ‘trade balance’ between Scotland and the rest of the UK: performing a multi-region environmental input- output analysis with limited data

(2008) The CO2 'trade balance' between Scotland and the rest of the UK: Performing a multi-region environmental input-output analysis with limited data, Ecological Economics, 66 (4), pp. 662-673. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Ecological Economic Policy Network (Scotecon). The authors are grateful to two anonymous referees for their constructive criticisms of two earlier drafts of this paper. Abstract In this paper we attempt an empirical application of the multi-region input-output (MRIO) method proposed by Turner, Lenzen, Wiedmann and Barrett (2007) in a recent issue of this journal in order to enumerate the CO2 pollution content of interregional trade flows between Scotland and the rest of the UK (RUK). We extend the analysis to account for direct emissions generation by households, as final consumers, and to a social accounting matrix (SAM), where a more comprehensive account of incomes and expenditures is possible. While the existence of significant data problems mean that the quantitative results of this study should be regarded as provisional, the interregional economy-environment IO and SAM framework for Scotland and RUK allows an illustrative analysis of some very important issues in terms of the nature and significance of interregional environmental spillovers within the UK and the existence of a CO2 'trade balance' between Scotland and RUK.