Discussion in the context of the Green 2.0 research program Andreas runs at SAP Research

Dienstag, 27. November 2007

CMU Green Design Institute's economic input-output models

I was visiting Carnegie Mellon University (CMU) on November 16th and met with a a variety of people from different departments. Among them was Scott Matthews from CMU’s Green Design Institute who presented some of the work which was quoted in a recent Wall Street Journal article. Essentially he uses input-output tables which describe the economic activities between different (about 500) industry sectors: Economic Input-Output Life Cycle Assessment (EIO-LCA) model, http://www.eiolca.net

For example you can look at the automotive industry and analyze how much the automotive industry is buying from other industry sector, let’s say paint, rubber, steel, aluminum, plastics, electronics, etc. The data does not only contain the dollar volume the trade activities but also the associated amount of environmental parameters and CO2. You can then apply this mechanism recursively and trace the complete supply chain. This gives you the CO2 and environmental footprint of the average American car.

Scott also mentioned that further studies have shown that typically the variation of a specific product from the average is not more than 5%.

Another interesting research result is that the CO2 footprint is created on average 80% down in the supply chain.

I see two interesting applications of this work to Green2.0: around the CO2 import/export topic and the total environmental footprint of goods and services.

Import/export of CO2

As this data is also available for China, it will be great basis for simulation the impacts of the policies on the CO2 imports. The data will allow identifying the average CO2 footprint of imports from China (in the 500 industry sectors), according to the different policies the CO2 adjusted cost of the imported goods can be determined and compared with locally available products. The question is: Which policies will alter the purchase behavior of importing companies and how?

Total environmental footprint

The Economic Input-Output Life Cycle Assessment will provide a great baseline for the investigation of the total environmental footprint of the selected products (rice products and beer). It will allow to show the impact of the green policies the companies have defined and implemented and how much they have move away from the average as a consequence.

Keine Kommentare: