Environmentally Extended Input–Output Analysis of the UK Economy: Key Sector Analysis

Shmelev, Stanislav Edward (2010): Environmentally Extended Input–Output Analysis of the UK Economy: Key Sector Analysis. Published in: QEH Working Paper Series No. Working Paper Number 183 (November 2010)

Abstract

The paper assesses the sustainability of investment in various economic sectors, with the aim of minimizing resource use and generation of emissions. The broad development focus of the paper and the potential for the proposed methodology to be applied in many different countries make it a useful methodological contribution to the global sustainability debate. The UK case is taken for illustration purposes, and (given the availability of the necessary data) this methodology could be applied in countries with various economic structures and specialisations. An environmentally extended static 123-sector UK input–output model is used, linking a range of physical flows (domestic extraction, use of water, and emissions of CO2, CH4, NOx) with the economic structure of the UK. A range of environmentally adjusted forward and backward linkage coefficients has been developed, adjusted according to final demand, domestic extraction, publicly supplied and directly abstracted water, amd emissions of CO2 and NOx,. The data on the final demandadjusted and environmentally adjusted forward and backward linkage coefficients were used in a multi-criteria decision-aid assessment, employing a NAIADE method in three different sustainability settings. The assessment was constructed in such a way that each sector of the UK economy was assessed by means of a panel of sustainability criteria, maximizing economic effects and minimizing environmental effects. This type of multi-criteria analysis, applied here for the first time, could prove to be a valuable basis for similar studies, especially in the developing world, where trade-offs between economic development and environmental protection have been the subject of considerable debate.

• Item Type: MPRA Paper
• Language: English
• Keywords: input–output analysis; environmentally extended; MCDA; key sectors; sustainability; ecological economics; UK
• Subjects: Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q3 - Nonrenewable Resources and Conservation > Q32 - Exhaustible Resources and Economic Development; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q53 - Air Pollution ; Water Pollution ; Noise ; Hazardous Waste ; Solid Waste ; Recycling; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q2 - Renewable Resources and Conservation > Q25 - Water; C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C67 - Input-Output Models; B - History of Economic Thought, Methodology, and Heterodox Approaches > B4 - Economic Methodology > B41 - Economic Methodology; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q57 - Ecological Economics: Ecosystem Services ; Biodiversity Conservation ; Bioeconomics ; Industrial Ecology

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