The effect of changes in trade patterns, particularly increasing international sourcing, on global CO
2
-emissions growth has yet to be clearly understood. In this paper, we estimate the emission ...cost of sourcing (ECS), which originates from replacing domestic products by imports from countries with more CO
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-intensive technologies. Using a structural decomposition analysis, we find that changes in sourcing patterns between 1995 and 2007 contribute (1) to reducing territorial emissions in high-wage countries (70% of their territorial emissions growth) and (2) to increasing territorial emissions in low-wage countries (30% of their territorial emissions increase). The net global effect, the ECS, amounts to 18% of total global CO
2
-emissions growth. Our results call the climate change policies based on territorial principles into question given that they disregard that differences in emission intensities between countries contribute to raising global emissions. In contrast, policies fostering the transfer of cleaner technologies to low-wage countries decrease the ECS.
Summary
Global multiregional input‐output databases (GMRIOs) became the standard tool for tracking environmental impacts through global supply chains. To date, several GMRIOs are available, but the ...numerical results differ. This paper considers how GMRIOs can be made more robust and authoritative. We show that GMRIOs need detail in environmentally relevant sectors. On the basis of a review of earlier work, we conclude that the highest uncertainty in footprint analyses is caused by the environmental data used in a GMRIO, followed by the size of country measured in gross domestic product (GDP) as fraction of the global total, the structure of the national table, and only at the end the structure of trade. We suggest the following to enhance robustness of results. In the short term, we recommend using the Single country National Accounts Consistent footprint approach, that uses official data for extensions and the national table for the country in question, combined with embodiments in imports calculated using a GMRIO. In a time period of 2 to 3 years, we propose work on harmonized environmental data for water, carbon, materials, and land, and use the aggregated Organization for Economic Cooperation and Development (OECD) Inter‐Country Input‐Output GMRIO as default in combination with detailing procedures developed in, for example, the EXIOBASE and Eora projects. In the long term, solutions should be coordinated by the international organizations such as the United Nations (UN) Statistical Division, OECD, and Eurostat. This could ensure that when input‐output tables and trade data of individual countries are combined, that the global totals are consistent and that bilateral trade asymmetries are resolved.
Abstract Scientists have proposed many “Beyond-GDP” indicators to replace the Gross Domestic Product (GDP) in order to quantify genuine societal development. While GDP is regularly projected, ...research on future trajectories of Beyond-GDP indicators is lacking, failing to meet policymakers’ needs. Focusing on the Human Development Index (HDI), this paper attempts to calculate one of the first global well-being projections for 161 countries by 2100 using the shared socioeconomic pathways (SSPs), the socioeconomic inputs underlying global climate change scenarios. The results indicate a potential global well-being improvement from medium to very high level, depending on the SSPs, with most countries reaching high human development under SSPs 1&5. While serving as an initial step in well-being projection, the results highlight a crucial gap in existing climate change models which are used by the IPCC—they inadequately account for the feedback effects of climate change on well-being. This oversight results in counterintuitive or potentially misleading well-being projections. Therefore, we propose steps to improve this situation. By synthesizing climate change feedback effects on HDI determinants, this assessment delves into their implications for well-being and further underscores the necessity for interdisciplinary collaborations among well-being researchers, climate scientists and policy modelers to achieve sound integral well-being projections.
This paper provides an overview of the plethora of approaches that are available to measure welfare and sustainable development. Many methods exist but there is no consensus on the ‘correct’ ...approach. Furthermore, we also show that the wide variety of sustainable development indictor (SDI) sets which have been adopted also show significant differences. We argue that this is mostly because many of these studies do not use a theoretical approach. We argue that the ‘capital approach’, which is used in the sustainability debate, is the most promising method to enhance international harmonization. Support is mounting in the scientific, policy and statistical communities for this approach in which economic capital, human capital, natural capital and social capital are distinguished. Many applications of this method express these capital stocks in monetary units (the ‘monetary capital approach’). This paper argues that the ‘hybrid capital approach’, in which the capital stocks can also be measured in non-monetary units, is probably more likely to achieve consensus over a large number of countries and institutes. Also a number of challenges remain for the capital approach. We argue that ideally the indicators should be based on satellite accounts of the national accounting framework. Also the capital approach could be further expanded to current welfare, progress of societies, inequality, and the international dimension of sustainability. We conclude that if the hybrid capital approach is adopted it may become easier to make consistent, theoretically sound and policy relevant comparisons between countries.
Reducing environmental costs is a significant concern for Indonesia's future. This paper explores Indonesia's environmental costs from emissions and forest resources and identifies the priority ...sectors in terms of economic and environmental performance. We use environmentally extended input–output analysis for calculating the environmental costs and further extension with linkages analysis to identify the priority sectors. The study finds that the total environmental costs of emissions due to final demand is around 7% of the GDP. This environmental cost is significantly due to domestic products with household consumption being the largest contributor. The top 10 sectors in the Indonesian economy are responsible for about 70% of the total environmental costs of emissions. Based on pollutant source, SO
x
, NO
x
, CO
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, and CH
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contribute more than half of emissions' ecological costs. We also find that forest resources' environmental cost is only 7.5% of the total environmental cost. Last, this study finds that key sectors of economic and sustainability points of view are textile manufacturing; publishing, printing, and reproduction of recorded media; chemicals n.e.c.; manufacture of other non-metallic mineral products; construction; and other land transport. Finally, this paper discusses the policy options for Indonesia to promote sustainable consumption and production in terms of reducing environmental costs while managing economic development.
Many environmental problems can be attributedto the extraction and emissions of physicalsubstances. Increasing our understanding of theeconomic and technological driving forcesbehind these physical ...flows can contribute tosolving the environmental problems related tothem. The input-output framework is a usefulsetting in which to integrate detailedinformation about economic structure andphysical flows. In this article a specificmethod in input-output analysis is reviewed,namely Structural Decomposition Analysis (SDA).It is based on comparative static analysis,which decomposes historical changes of a policyvariable into determinant effects. SDA has beenapplied, for example, to analyze the demand andtechnological driving forces of energy use,CO2-emissions and various other pollutantsand resources. This article examines thetheoretical aspects of structuraldecomposition, in particular those concerningphysical flows and environmental issues.Furthermore, the article includes an extensivesurvey of empirical studies. Copyright Kluwer Academic Publishers 2002
The System of National Accounts (SNA) has adapted, and will adapt, as economic, social and environmental conditions change. The revision process of the SNA2008, which is now underway, will take place ...in the context of developments such as globalization, digitalization, climate change, biodiversity loss, inequality as well as the COVID19-pandemic. The new SNA will have to make clear how the economy relates to concepts such as wellbeing, sustainability and equity and will also need to be linked to major global initiatives such as the Sustainable Development Goals (SDGs). I propose a broad accounting framework for Wellbeing, Sustainability and Equity (WiSE). This provides a wider context for the System of National Accounts (SNA) and links to the other frameworks such as the Sustainable Development Goals, and other global initiatives such as the Better Life Initiative (OECD), Changing Wealth of Nations (World Bank) and the Inclusive Wealth Index (UN). The WiSE framework is not a new system, but rather a combination of existing accounting frameworks which have been proposed in the last five decades. The paper starts off by formulating principles to guide the work on the broader framework. Subsequently, seven accounts are proposed which quantify the various dimensions of the economic, societal and environmental systems. This interdisciplinary accounting framework involves knowledge from many scientific disciplines and multiple units are used (mass, energy, people, time, money etc). The most controversial part of any discussion about the future of the SNA is the valuation of non-market phenomena such as unpaid household work/care or environmental damages. This paper argues that the discussion is too focused on methods derived from welfare economics. Rather than valuation we should be focusing on evaluation methods from many scientific disciplines which help to assess progress towards wellbeing, sustainability and equity. This interdisciplinary perspective should also guide our thinking to select key indicators to replace GDP.
The System of National Accounts (SNA) has adapted, and will adapt, as economic, social and environmental conditions change. The revision process of the SNA2008, which is now underway, will take place ...in the context of developments such as globalization, digitalization, climate change, biodiversity loss, inequality as well as the COVID19-pandemic. The new SNA will have to make clear how the economy relates to concepts such as wellbeing, sustainability and equity and will also need to be linked to major global initiatives such as the Sustainable Development Goals (SDGs). I propose a broad accounting framework for Wellbeing, Sustainability and Equity (WiSE). This provides a wider context for the System of National Accounts (SNA) and links to the other frameworks such as the Sustainable Development Goals, and other global initiatives such as the Better Life Initiative (OECD), Changing Wealth of Nations (World Bank) and the Inclusive Wealth Index (UN). The WiSE framework is not a new system, but rather a combination of existing accounting frameworks which have been proposed in the last five decades. The paper starts off by formulating principles to guide the work on the broader framework. Subsequently, seven accounts are proposed which quantify the various dimensions of the economic, societal and environmental systems. This interdisciplinary accounting framework involves knowledge from many scientific disciplines and multiple units are used (mass, energy, people, time, money etc). The most controversial part of any discussion about the future of the SNA is the valuation of non-market phenomena such as unpaid household work/care or environmental damages. This paper argues that the discussion is too focused on methods derived from welfare economics. Rather than valuation we should be focusing on evaluation methods from many scientific disciplines which help to assess progress towards wellbeing, sustainability and equity. This interdisciplinary perspective should also guide our thinking to select key indicators to replace GDP.
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