Carbon Footprint Calculation

Using Input-Output Models

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 Outline

• Climate change and carbon footprints

• History of input-output analysis
• Fundamentals of input-output analysis
• A simple example of footprint computation
• Application to Philippine setting
• Exercise on carbon footprinting
• Conclusions

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Climate Change is a Critical
Environmental Issue

Kota Kinabalu waterfront at dusk 3

 Growing Concern on Carbon
Emissions
• Emissions of greenhouse gases (e.g., CO2, CH4, N2O)
are widely believed to be driving global climate change
• These emissions are highly correlated with energy use
and industrial activity
• Global emissions are in the order of 30 109 tons per
annum
• The Philippines contributes about 0.3% of global
emissions

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 Carbon Footprinting
• Due to the non-local effects of climate change, it is
always of interest to determine the levels of cumulative
GHG emissions associated with a product or service.

• “Carbon footprint” is a metric, usually expressed in mass

units of GHG’s per unit of output (e.g., kg CO2 per kW-h),
used to quantify how climate-friendly a given product
system is.

• Consider the problem: how much CO2 emissions are

generated to make 50 kg of rice?

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 Top-Down Footprinting
• Product chains or “life cycles” are often highly complex,
consisting of large numbers of interconnected activities.

• This situation leads to difficulties in developing models

 Modelling is highly data-intensive and thus time-
consuming
 A high degree of uncertainty exists in terms of different
levels of industrial efficiency of suppliers
 A tractable, approximate model capable of giving useful
results, especially for “background” systems
 Economic input-output (EIO) techniques based on the
work of Nobel laureate Leontief can be used
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Input-Output Analysis:
Historical Perspective
Historical Perspective
Wassily Leontief received the
Sveriges Riksbank Prize in
Economic Sciences in Memory of
Alfred Nobel 1973

"for the development of the input-

output method and for its
application to important economic
problems"
 Diverse Uses of Input-Output Models
• Economic analysis and forecasting
• Analysis of nutrient flows in natural ecosystems
and food chains
• Analysis of industrial metabolism in industrial
ecology
• Life cycle assessment and ecological
footprinting
• Analysis of dynamics of energy supply chains
• Inoperability risk analysis for disasters
 Limitations of Input-Output Models for
LCA
• Can provide LCIs only for pre-consumer stages
• Imported commodities should be negligible
• LCI data is normally 1 – 5 years old
• Industries are more aggregated
• Lack of sectoral environmental data in most
countries
I/O Fundamentals
 The Basic Model
 Each unit of ouput of a given
process requires a fixed set
of inputs from other
Inputs Outputs processes.
 Outputs of processes may
also serves as inputs for
other processes
 Process yields are defined
by fixed* numerical values
known as technical
coefficients.

*scale invariant
 The Basic Model
Flow balances for m
outputs from n
Inputs Outputs processes are defined
by:
Sj aij xj = yi ∀i

Or,in matrix notation:

Ax = y
 The Basic Model
The resulting system has m equations and n
unknowns:
Sj aij xj = yi ∀i

For the case of m = n and the equations are

independent, a unique solution may be found
by matrix inversion:

x = A–1y
 The Basic Model
As a result of the convention used in
recording transactions across economic
systems, (I – Z) often replaces A:

x = (I – Z)–1y

which is Leontief’s Nobel Prize winning

equation. (I – Z)–1 is known as the Leontief
inverse.
A Simple Example of I/O Modelling

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A Hypothetical Two-Sector Economy

Net economic output in million

Euros
Emissions in million kg
What is the emission intensity of
each sector in kg/Euro?

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Table of Transactions

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Input-Output Model

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Input-Output Models with Environmental Flows

x = (I – Z)–1 y where:
I = identity matrix
g=Rx Z = technical coefficient
matrix
y = net output vector
x = gross output vector
R = direct emissions intensity
matrix
g = emissions vector

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Breakdown of Total Emissions Using IO Model
0.315 kg
per Euro,
of which
33% is
indirect

0.58 kg per
Euro, of
which 9%
is indirect

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 What the Decomposition Means

These two “layers”

can be
superimposed to
yield the total
economic system

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Application of I/O Model to Analysis of
Philippine Carbon Emissions

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 Input-Output Models of Carbon Emissions

• Emissions from highly interconnected economic systems

need to be modelled using life cycle concepts.
• It is necessary to account not just for direct emissions,
but also indirect emissions arising from sectoral
interdependencies.
• Input-output based modeling is appropriate for this
application (Heijungs & Suh, 2002; Hendrickson et al.,
2006; Nguyen & Ishihara, 2006).

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 Overview of our Work

• Working with my economist colleague, Joel Tanchuco

• Obtained 2000 IO Tables from Philippine Government at
three levels of disaggregation:
– 11 Sectors
– 60 Sectors
– 250 Sectors
• Obtained published sectoral direct carbon emissions
(http://earthtrends.wri.org/pdf_library/country_profiles/cli_
cou_608.pdf)
• Currently reconstructing detailed/disaggregated
emissions profile from energy use statistics

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Sectoral Carbon Emissions in the Philippines

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Sources of Indirect Emissions

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 Partial Results Using 60-sector IO Tables

• Carbon emission levels per P1,000 of major agricultural

crops:
– Rice, 5.8 kg
– Corn, 5.1 kg
– Coconut, 4.7 kg
– Sugarcane, 8.5 kg
• Carbon emission levels for services provided by:
– Private educational institutions, 2,200 kg per P150,000
– Hotels and restaurants, 11.7 kg per P1,000

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I/O Exercise
 Aggregated Philippine I/O Data
(in billion pesos except where indicated)

Agriculture Industry Services Total

Output
Agriculture 50 366 35 687
Industry 99 1696 537 4337
Services 22 390 264 2497
CO2 (kg/P) 0.003 0.014 0.004

Using this data, find the carbon footprint of:

(a) A 50 kg sack of rice
(b) A copy of the Philippine Star newspaper
(c) 1000 text messages
(d) One term of studying at DLSU

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Final words
 Other Notable EIO/LCA Efforts
• Carnegie Mellon University’s Green Design Institute has
a web-based, open access EIO-LCA model accessible at
http://www.eiolca.net

• Leiden University’s Center for Environmental Sciences

developed the Excel/VBA program MIET (Missing
Inventory Estimation Tool) which can be downloaded
from http://www.leidenuniv.nl/interfac/cml/ssp/index.html

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 Advantages and Disadvantages
PROS CONS
• Data on inter-industry • Gathering inter-industry
exchanges (Z) are exchange data (Z)
routinely documented by involves time delays
governments • Sectoral emissions data
• Any feedback loops are (R) may unavailable or
implicitly accounted for incomplete
• Most appropriate for low- • Effects of imports are not
resolution modelling of accounted for
“background” systems in • Accuracy is limited by the
hybrid models resolution of the EIO
tables

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 Further Reading
[1] Heijungs, R and Suh, S. 2002. The computational structure of life cycle
assessment. Kluwer, Dordrecht.

[2] Hendrickson, C. T., Lave, L. B. and Matthews, H. S. 2006. Environmental

life cycle assessment of goods and services. An input-output approach.
RFF Press, Washington, DC.

[3] http://www.nscb.gov.ph/io/default.asp.

[4] http://earthtrends.wri.org/pdf_library/country_profiles/cli_cou_608.pdf.

[6] Nguyen, T. A. T. and Ishihara, K. N. 2006. Analysis of changing hidden

energy flow in Vietnam. Energy Policy 34: 1883 – 1888.

[7] Velasquez, E. 2006. An input–output model of water consumption:

Analysing intersectoral water relationships in Andalusia. Ecological
Economics 56: 226 – 240.
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 Acknowledgement

• A portion of this work was undertaken as part of the

Eurpoean Commission Asia Link Project Contract
2005/109-628
• I also wish to thank my colleague, Joel Tanchuco, and
the National Statistical Coordination Board of the
Republic of the Philippines for providing us with copies
of the 2000 EIO Tables

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 Thanks for your attention

Comments and questions are welcome

Or contact me at
Raymond.Tan@dlsu.edu.ph
Phone/Fax: +632-524-0560

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