A Note on the Magnitude of the Feedback Effect in Environmentally Extended Multi‐Region Input‐Output Tables

Abstract

SummaryGlobal multiregion input-output (MRIO) tables have been developed to capture international spillover effects due to demand in one country and production in other countries. International spillovers have been growing and have become so dominant, especially in environmental analysis, that their inclusion is essential when analyzing impacts of consumption. MRIO tables give full coverage of the world economy, but do not always respect the official data of a given country. When international spillovers also cause increased production in the country of demand, we see what are known as "feedback effects." As coupled models are being developed that make use of an official foreground national input-output table (IOT) alongside an existing global MRIO, we are left in the situation where a coupled model does not use the official foreground information when modeling international feedback loops. The question thus arises: How large are these feedback loops for different environmental impacts? We look specifically at the amount of domestic production that is embodied in imports back into that region. We find that for emissions, the feedbacks are small, usually <2% of the total import footprint, though up to 6%+ for some countries in some years for some stressors. Our findings suggest that using Leontief multipliers from available MRIOs may be an acceptable method for modeling imports into national IOTs for environmentally extended MRIO analysis.

Towards Robust, Authoritative Assessments of Environmental Impacts Embodied in Trade: Current State and Recommendations

“…In another publication in this Special Issue, Moran and colleagues () performed an assessment of such feedback embodied impacts of carbon emissions per country, using EXIOBASE v3 for 2011. The results are presented in table below.…”

“…Feedback embodied impacts (fraction of the embodied impacts in imports originally emitted in the country, i.e., exports feeding back into imports) as calculated with EXIOBASE v3, for carbon emissions in 2012(Moran et al 2018) …”

Recent Progress in Assessment of Resource Efficiency and Environmental Impacts Embodied in Trade: An Introduction to this Special Issue

“…In principle, exports from the specific country for which footprints are calculated are not included in the GMRIO analysis anymore, which can lead to errors if the export of components by that country is likely to show up, after traveling through the value chains, in the imports of that country. As shown by Moran and colleagues (), this problem is more significant for big economies compared to small ones.…”

“…Ensuring a maximum fit with country SUT/IOT, as happens in the earlier mentioned SNAC approach, is hence a good strategy to reduce uncertainty further. With Moran and colleagues () showing that feedback emissions are low for most economies, the simplified SNAC approach is a good and less time‐consuming alternative. Finally, with the ICIO now available as the first ever GMRIO produced by a supranational agency (OECD), one could consider the following: Future versions of EXIOBASE could be built with ICIO as a constraint.…”

Relevance of Global Multi Regional Input Output Databases for Global Environmental Policy: Experiences with EXIOBASE 3

“…They find that carbon, land, water, and material footprints cover almost 60% of the variance in product rankings among environmental indicators and that extension by five impact‐oriented indicators increases the coverage to 95%. Moran and colleagues () analyze so‐called feedback emissions—in considering how intertwined the global economy has become, they look at how much of the pollution embodied in exports of a country is embodied back in the imports of that country, after traveling through global value chains. Their conclusion is that apart from some big economies such as China, such feedbacks are very limited, and there are thus potentially simple ways to link GMRIO models to individual country data not adequately represented in GMRIO databases.…”