Input-output analysis of the networks of production, consumption and environmental destruction in Finland

Aalto University, P.O. Box 11000, FI-00076 Aalto www.aalto.fi Author Tuomas J. Mattila Name of the doctoral dissertation Input-output analysis of the networks of production, consumption and environmental destruction in Finland Publisher Aalto School of Science Unit Department of Mathematics and Systems Analysis Series Aalto University publication series DOCTORAL DISSERTATIONS 124/2013 Field of research Systems and Operations Research Manuscript submitted 26 February 2013 Date of the defence 12 September 2013 Permission to publish granted (date) 24 April 2013 Language English Monograph Article dissertation (summary + original articles) Abstract Modern systems of production and consumption are complex and global. Supply networks cross continents, linking the consumption in Finland to land use in the Latin-America and South-East Asia. Economic input-output analysis was originally developed to track the production networks of a single country, but it has recently been applied to include environmental impacts over several regions. Current environmentally extended input-output (EEIO) models connect consumption, production and environmental impacts into a transparent system of equations, which can be used to examine the direct and indirect effects of different economic activities. The combination of EEIO with life cycle assessment (LCA) has allowed the industrial ecological analysis of various environmental footprints (for example ecological, carbon and water). However these footprints capture only a narrow share of the overall sustainability. The aim of this study was to broaden the scope of previous footprint analyses by focusing on new environmental impacts such as biodiversity, land use and ecotoxic effects. Impact assessment models for each impact category were connected to the general EEIO framework. This allowed the detailed analysis (structural path, structural decomposition and sensitivity analysis) to find the key components causing environmental destruction through production and consumption. These identified key components can be used to model and manage the environmental issues from a whole system perspective.Modern systems of production and consumption are complex and global. Supply networks cross continents, linking the consumption in Finland to land use in the Latin-America and South-East Asia. Economic input-output analysis was originally developed to track the production networks of a single country, but it has recently been applied to include environmental impacts over several regions. Current environmentally extended input-output (EEIO) models connect consumption, production and environmental impacts into a transparent system of equations, which can be used to examine the direct and indirect effects of different economic activities. The combination of EEIO with life cycle assessment (LCA) has allowed the industrial ecological analysis of various environmental footprints (for example ecological, carbon and water). However these footprints capture only a narrow share of the overall sustainability. The aim of this study was to broaden the scope of previous footprint analyses by focusing on new environmental impacts such as biodiversity, land use and ecotoxic effects. Impact assessment models for each impact category were connected to the general EEIO framework. This allowed the detailed analysis (structural path, structural decomposition and sensitivity analysis) to find the key components causing environmental destruction through production and consumption. These identified key components can be used to model and manage the environmental issues from a whole system perspective.