Developing multi-regional physical supply and use accounts for the analysis of global material and energy flows
Funding institution: Austrian Science Fund (FWF)
Duration: March 2019 – February 2022
Partner institution: Wuppertal Institute for Climate, Environment, Energy / Germany
The overall objective of the MF-GLOBE project is to develop trade-linked, multi-regional physical supply/use and physical input-output accounts, applying the guidelines of the UN SEEA system. While the developed methodological framework is open to all categories of resource flows, focus in the empirical part is set on biomass and energy commodities and their interlinkages. In order to set up the trade-linked accounts, the project implements a consistent combination of global data sets, such as from the International Energy Agency (IEA), the Food and Agriculture Organization (FAO) and UN Comtrade. As not all supply chains can be modelled based on data in physical units, we couple the physical accounts with a monetary multi-regional input-output model. This creates a hybrid analytical tool for integrated assessments of global biomass and energy flows along international supply chains at an unprecedented level of product and country detail.
In the context of the Paris climate agreement, the Sustainable Development Goals (SDGs) and the resource efficiency and circular economy agendas, issues related to global trade with natural resources such as materials and energy, and the implications of an increasing displacement of environmental burdens have rapidly gained in importance in international policy debates in the past few years. Material and energy flow analysis has developed into an important tool to support the monitoring of this transition.
In order to consider global aspects related to a country’s consumption of products and services, indicators covering indirect (or upstream) resource requirements need to be applied. In particular, methods based on environmentally extended multi-regional input-output (MRIO) analysis have rapidly gained in importance to calculate the footprints of countries. Despite the significant progress in recent years, the robustness of MRIO-based calculations of global physical flows has been questioned, as using commodity flow data in monetary units to trace physical flows creates various uncertainties.
In order to alleviate these, a number of economy-wide material flow studies have suggested moving from sector-level economic data towards a more detailed physical data basis. The MF-GLOBE project builds on these experiences and significantly advance the state of the art through developing and applying the first multi-regional physical supply and use tables (mrPSUT) and physical input-output tables (mrPIOT) with worldwide coverage.
The overall objective of the MF-GLOBE project is to develop trade-linked, multi-regional physical supply/use and input-output accounts on a very high product detail for biomass and energy commodities. Thereby, MF-GLOBE aims to enhance the robustness of material and energy footprint methods and open up a new area of analytical options to investigate material and energy flows along international supply chains. This delivers a fully transparent and urgently needed empirical basis for identifying possibilities to transform production, trade and consumption patterns towards a low-carbon, resource efficient and circular economy.
MF-GLOBE creates the first trade-linked mrPSUTs and mrPIOTs for biomass and energy. This provides a very flexible tool for the assessment of global displacements of natural resources and related environmental impacts in the closely inter-connected areas of land use, food and energy production, trade and consumption. The new tool allows performing trade and footprint analyses on the global level following a detailed physical allocation logic, thus alleviating uncertainties from assumptions that are inherent in current environmental MRIO models.
One key feature of the mrPSUTs and mrPIOTs developed in MF-GLOBE is the full transparency of all intra- and international product flows and processing steps. We develop and publish all underlying codes on the open software development platform ‘GitHub’, thus ensuring that each step is documented and entirely reproducible. The flexible structure of the data system will also easily allow extensions in the future, for example, regarding specific products, processes and new technologies.
The MF-GLOBE project connects the two perspectives of actual and embodied physical flows, thereby establishing a common basis for integrated analyses. The mrPSUTs developed within the project explicitly disclose some major waste flows (e.g. on-farm biomass waste). This opens up possibilities for analyses of biomass waste streams and potentials of their use in a circular economy.
We implement the project in five sequential development steps, as illustrated in the figure below.
Step 1: Setting up physical supply and use accounts
The basic concept for national PSUTs is applied to biomass and energy products following the SEEA methodological guidelines of the UNa. Classifications of processes and products covered by the PSUTs are set up dependent on the structures of the data sources applied, which are mainly statistics from FAOSTAT for biomass and from the IEA for energy products. Uniformity and consistency of data is ensured, since they are collected from different sources.
Step 2: Modelling the biomass-energy link
Energy and biomass flows have clear overlaps, for example where biomass from crops, animals or wood is used for energy purposes. We will therefore link the energy and biomass PSUTs through setting up biomass use tables for energy transformation processes as well as energy use tables for crop production.
Step 3: Trade-linking of supply and use accounts
National PSUTs contain product-specific data for physical imports and exports without specifying origin or destination. We develop a systematic way of processing bilateral trade data from UN Comtrade, including re-classification, data gap estimation, harmonization and balancing procedures, in order to derive balanced bilateral trade matrices for each commodity in accordance with the trade volumes reported in the PSUTs.
Step 4: Construction of symmetric physical input-output tables
In order to use the trade-linked mrPSUTs for Leontief-type footprint calculations, we transform them into symmetric physical input-output tables (mrPIOTs). We conceptualize several analytical options for the allocation of process inputs to outputs (according to weight, value, etc.) and for treating waste flows.
Step 5: Integration of physical and monetary MRIO tables
The final step is to integrate the multi-regional PIOTs with a monetary MRIO database (such as EXIOBASE), in order to set up a mixed-unit MRIO system. This allows tracking all flows of biomass and energy products from resource extraction to final consumption and thus investigate footprints, either along physical supply chains or combined physical-monetary supply chains.