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Canada-U.S. Binational EIO-LCA Model
Jonathan NormanHeather L. MacLean
Department of Civil EngineeringUniversity of Toronto
LCA of Oil Sands Technology – Kick-Off MeetingNovember 3, 2006
University of Calgary
Outline
Environmental Input-Output Analysis Overview, limitations, applications Canadian and U.S. EIO-LCA models
Rationale for Binational EIO models
Canada-U.S. EIO-LCA model
Applications Life-Cycle Assessment for Canadian oil sands
Motivation
Quantify energy use & emissions associated with oil sands economic activity
Economic Activity
↕
International Trade
↕
Energy Use/Emissions
United States
Canada
Input-Output Tables
Systems of National Accounts Accounts for all transactions in an economy…
Interindustry Demand
ZFinal Demand
Y
Outputs
Inp
uts
Total Output, X
Input-Output Analysis
Uses IO tables to quantify interrelationships between industrial sectors (Leontief, 1941)
∆X = (I-A)-1∆Y
∆X = Change in Economic Output by sector
∆Y = Change in Consumer Demand
(I-A)-1 = Leontief Inverse
E = Total emissions across all sectors
Accounts for direct and indirect effects of production
EE = E
EIO-LCA Analysis
Source: Bjorn et al. (2004)
Motor vehicles
Pollutants(CO2, CH4, etc.)
Motor vehicle parts
Other transport equipment
Business services
Primary iron and steel
ENERGY
Primary iron and steel
Business services
Other transport equipment
Motor vehicle parts
ENERGY
Pollutants(CO2, CH4, etc.)
Pollutants(CO2, CH4, etc.)
Final Demand
Direct Impacts
Indirect Impacts ...
U.S. & Canadian EIO-LCA models
U.S. model created by Green Design Initiative – Carnegie Mellon University (1995) (www.eiolca.net) 1997 US Input-Output Table (491 sectors) Coupled to wide array of environmental data
Energy, Fuel use, Greenhouse Gases, much more.
Canadian model originally created by U of T (2003) 1997 Candian Input-Output Table (117 sectors) Coupled to energy, fuel use and GHG data
(compiled by Statistics Canada)
Comparing US and Canada
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Propane
Coal
Petroleum Products
Electricity
Natural Gas
Agriculture Mining, Oil & Gas Manufacturing
U.S.Canada U.S.Canada U.S.Canada
Significant international differences in fuel use:
0
1
2
3
4
5
6
7
8
9
10
Canada
United States
Comparing US and Canada
MT
CO
2 eq
. per
$U
S M
illio
n
Greenhouse Gas Emissions
Agriculture Mining &Utilities
LightManufacturing
PrimaryManufacturing
SecondaryManufacturing
Electricity &Natural Gas
Canada – U.S. Trade
Canada’s economy is highly dependent on that of the U.S.
¼ to ⅓ of GDP in Canada associated with US Trade NAFTA Trade Block – over past 10 years trade has
increased signifcantly.
To improve accuracy EIO-LCA of major international projects like the oil sands must consider emissions and energy use in the U.S.
Canada-U.S. EIO-LCA
Binational model links Canadian & U.S. EIO-LCA models via trade flows
Captures Biregional Feedbacks: Demand Canada Production Canada &
Demand U.S. Imports Production U.S. Demand Can Imports
Production Canada….etc.
Result is total energy use and emissions across Canada & the U.S. for a particular economic activity.
Big Benefits for Canadian LCA
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
120%
Per
cen
t D
iffe
ren
ce in
En
erg
y/G
reen
ho
use
Gas
Inte
nsi
ty
Energy
Greenhouse Gases
Difference between bi-national EIO and Canadian EIO alone
Agriculture Mining &Utilities
LightManufacturing
PrimaryManufacturing
SecondaryManufacturing
Canada-U.S. EIO-LCA Analysis Limitations
Simplified linear, static view Product mix issues Cradle-to-gate Data limitations
Advantages Intersectoral detail System boundary is entire economy (Canada & U.S) Quick, transparent – often needed for ‘real-world’ policy Excellent first-round estimation for a snapshot in time
Application to Oil Sands LCA
Advantages of Binational EIO-LCA allow it to be used effectively for comparison of different oil sands technology scenarios, considering: Total emissions across the supply chain Economy-wide Canada and U.S. emissions
Binational EIO-LCA can be improved by using hybrid techniques that incorporate process-based LCA for crucial aspects of oil sands processes.
Thank You!
Questions & Comments
More Information:
Jon NormanDepartment of Civil Engineering
University of TorontoTel: 416-327-8545Fax: 416-978-3674
E-mail: [email protected]
North American EIO Model
Based on a Chenery-Moses Multiregional Input-Output Framework (Chenery & Clark, 1959; Moses, 1955)
Modified to account for Competitive Imports
Separates out trade in the Canada/U.S. IO Tables Final demand = domestic demand + exports Economic output = domestic output + imports Import co-efficient:
=
n
jidij
ii
yz
mM
1
Imports of commodity i
Total domestic demand for commodity i
Linking Methodology
Bi-national Canada-U.S. I/O Model
=
U
C
X
X 1
,
,
)(ˆ
ˆ)ˆ(
UUCCU
UUCCC
AMIIAM
AMAMII
RUCCUUU
RCUUCCC
exYMYMI
exYMYMI,,
,,
ˆ)ˆ(
ˆ)ˆ(
Final DemandInternational (I-A)-1
TotalOutput
Limitations & Advantages
Limitations
Same limitations as National EIO models, but also: Import proportionality assumption Data Limitations in terms of harmonization
Key Advantages Accounts for trade effects ignored in national EIO Allows for North American-wide policy application:
More accurate Life-Cycle Assessment Modeling cross-border impacts of production/consumption
0
5
10
15
20
25
Petroleum andCoal ProductsManufacturing
Pulp, Paper andPaperboard Mills
Primary MetalManufacturing
ConvertedPaper ProductManufacturing
Oil and GasExtraction
Wood ProductManufacturing
Printing andRelated Support
Activities
Motor VehicleBody, Trailer &
PartsManufacturing
OtherTransportation
EquipmentManufacturing
Fishing, Huntingand Trapping
Canadian Energy Use
US Energy Use
US Energy Pull on Canada
Energy Use Resulting from $1M U.S. Final Demand
TJ/
$US
Mill
ion
of U
.S.
Fin
al D
em
and
Canadian Energy Pull on US
0
5
10
15
20
25
30
35
Pesticides,Fertilizer and
OtherAgriculturalChemical
Manufacturing
Basic ChemicalManufacturing
Resin, SyntheticRubber, andArtif icial and
Synthetic Fibresand FilamentsManufacturing
Textile andTextile Product
Mills
Plastic andRubber ProductManufacturing
Motor VehicleBody, Trailer &
PartsManufacturing
ElectricalEquipment and
ComponentManufacturing
HouseholdAppliance
Manufacturing
MachineryManufacturing
Motor VehicleManufacturing
US Energy Use
Canadian Energy Use
Energy Use Resulting from $1M Canadian Final Demand
TJ/
$US
Mill
ion
of C
dn.
Fin
al D
eman
d
Methodological Approach
Environmental Input-Output (EIO) Analysis
Popular modeling technique based on National Accounting methods used to determine GDP
Applied effectively to estimate environmental/energy impacts associated with economic production since early 1970’s
Our approach: Build new EIO models for Canada and US and link them through trade flows