Integrated Sustainability Analysis
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Input-Output Conference 2010

The Integrated Sustainability Analysis (ISA) team in the School of Physics of the University of Sydney is the lead organization in a team of eight universities, Intersect, and the CSIRO, responsible for running the recently funded Industrial Ecology Virtual Laboratory. The $1.1 million funding for the virtual laboratory was awarded by the Australian Government's NeCTAR scheme.

Recent research at the School of Physics has produced methods for advanced computation and automation that enable the rapid and cost-effective deployment of harmonised, large-scale, detailed Multi-Region Input-Output (MRIO) analysis systems. One of these methods includes the use of constrained optimisation for scenario modeling.

As a result, the Industrial Ecology Lab will deliver Australian sub-national MRIO infrastructure that utilises the best quality data available.

The MRIO analysis technique has emerged as the major tool underpinning consumption-based accounting of environmental impacts. The ISA team is amongst the world leaders in this field, and has recently published a paper in Nature that describes the linkages between biodiversity loss and international trade.

The term 'consumption-based accounting' arose when China's chief climate negotiator, in 2009, argued that carbon emissions stemming from the production of Chinese exports should be the responsibility of the importing countries. Attributing the emissions from one region to those regions that import (consume) its goods and services then became known as consumption-based accounting.

The highest profile application of this consumption-based accounting is for environmental footprinting. As an example, the technique of carbon footprinting is increasingly recognised as providing valuable information on the driving forces of greenhouse gas emissions. However, generating accurate consumption-based accounts is a major challenge as it requires the evaluation of trillions of production processes, supply chains and trade links between economic entities all over the world.

Input-output (IO) tables summarise all financial transactions between all industry sectors in an economy. By linking IO tables to environmental statistics it becomes possible to trace environmental impacts through complex inter-industry supply-chain networks. This ability has made IO techniques among the most rapidly growing applications in the interdisciplinary field of industrial ecology, linking disciplines such as economics, engineering and environmental sciences. Today, Multi-Region Input-Output (MRIO) tables are routinely used to establish the carbon and environmental footprints of nations. In a world where consumption and production are increasingly spatially separated, the capacity for MRIO to provide high quality consumption-based accounting gives it a high degree of policy relevance.

IO tables also make it possible to use advanced techniques for environmental Life-Cycle Assessment (LCA), whereby detailed process-specific data are combined with overarching IO data. This enables the evaluation of multiple environmental impacts at a high level of detail and completeness, improving the quality and reliability of information provided for applications such as eco-labelling of products, corporate reporting, supply-chain analysis, policy formation, and infrastructure selection.

A further integration and harmonisation of methods for sustainability accounting, analysis and assessments would be ground-breaking, and is long overdue. The current trend of regionalisation in LCA is mirrored by a trend in global, multi-national-scale analysis in IO research. Linking and integrating these developments will deliver an extremely powerful and useful method.

National IO tables are issued regularly by statistical offices in more than 100 countries. However in countries such as Australia, that are so geographically and climatically diverse, economic structure and production activities vary significantly between sub-national regions. This regional variability is not captured in national IO tables. In order to make this critical regional detail available for environmental footprint and LCA applications, sub-national multiregion (MRIO) variants of IO tables are required. Only a handful of research groups in the world have taken on the task of compiling sub-national MRIO databases. The conventional approach for this is prohibitively arduous, labour and cost-intensive, because regional economic data and environmental data are notoriously scarce and mis-aligned.

Hosting the Industrial Ecology Lab on a NeCTAR Research Cloud will enable the MRIO tables to be regularly updated into the future, and will make the infrastructure available to a much broader section of Australia's research and policy development community. Inclusion of a comprehensive set of environmental extensions will allow users to carry out environmental footprinting, life-cycle and other sustainability assessments at performance levels that are far greater than anything achieved to date.

For further information please contact

Prof Manfred Lenzen
ISA, A28
The University of Sydney NSW 2006
+61 (0)2 9351-5985