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ConAccount Meeting11-12th October 04, Zurich
Andrea StockerAndrea StockerSustainable Europe Research Institute (SERI)Sustainable Europe Research Institute (SERI)
Modelling Changes in Resource Modelling Changes in Resource
Use of the Austrian EconomyUse of the Austrian Economy
Andrea Stocker ConAccount Meeting, Zurich, 11-12 October, 2004 Page 2
Structure of presentation
1. Aim and Motivation
2. Input-Output Analysis
• Explanation of extended IOA
• Empirical results
3. Decomposition Analysis
• Explanation of chosen method
• Empirical results
Andrea Stocker ConAccount Meeting, Zurich, 11-12 October, 2004 Page 3
Aim and Motivation
• Showing the resource use of the Austrian sectors
• Analysing which sectors are responsible (directly and indirectly) for the overall resource use, using Input-Output Analysis
• Analysing the development of the resource use in the period 1995 to 2000
• Separating the changes in resource use in a technological, structural and final demand effect (Structural Decomposition Analysis).
Aim of the contribution
Andrea Stocker ConAccount Meeting, Zurich, 11-12 October, 2004 Page 4
Aim and Motivation
• Dematerialization as important goal to reach ecological sustainability
- Reducing material inputs
- Relative vs. absolute dematerialisation
• Decrease of resource use and its decoupling of economic growth represent central goals of the Austrian Strategy for sustainable development
• Parallel analysis of economic and environmental aspects, which can be done with IO Analysis
Motivation
Andrea Stocker ConAccount Meeting, Zurich, 11-12 October, 2004 Page 5
Theoretical Methods
Input-output approach for analyzing the resource use of the Austrian economy
• Provides a comprehensive picture of inter-linkages between environment and socio-economic system as it allows to combine bio-physical data and social data with monetary input-output-models
• Shows not only direct but also indirect effects which occur because of the various relationships between the sectors of an economy.
Structural Decomposition Analysis
• Using Input-Output Approach to decompose the material use in its underlying factors.
Andrea Stocker ConAccount Meeting, Zurich, 11-12 October, 2004 Page 6
Extended Input-Output Analysis
• Integration of material flows in IO-Analysis: Method developed by Hinterberger, Femia, Moll (1998)
• Extending monetary IO tables by an additional row of biophysical information
• Extension with material inputs is reasonable because the hypothesis of a closed monetary cycle between firms and households, which do not need absorptions from nature and deliveries to the nature is not adequate.
• Comprehensive quantification of direct and indirect resource inputs activated by final demand.
Extended IO Analysis
Andrea Stocker ConAccount Meeting, Zurich, 11-12 October, 2004 Page 7
Monetary IO table with additional row of material input Use
SupplySectors (1,..,n)
Final demand (y) Total output
Sectors (1,..,n) Z y x
Value Added v'
Imports m'
Total input x'
Material input(in tons per sector)
DMI'
Extended IO Analysis
LyyAIx 1)(
MyDMI
1ˆ'' xDMIm
LmM ˆ
Static monetary IO model
Sectoral material input coefficients
Multiplier matrix, weighted by physical units (material input in tons)
Direct and indirect MI of final demand
Andrea Stocker ConAccount Meeting, Zurich, 11-12 October, 2004 Page 8
Empirical Analysis
• To get a clear picture of the interrelations between the natural and the socio-economic (sub-)system, indicators of MFA can be related to Input-Output Tables.
• Input-Output Tables for 1995 and 2000 are available
• Austrian time series of material input from 1960 to 2001, using Direct Material Input (DMI) as indicator (domestic extraction plus imported materials)
Data requirements
Andrea Stocker ConAccount Meeting, Zurich, 11-12 October, 2004 Page 9
Static Analysis
• Direct and total amounts for 1995 and 2000
• Material intensity for 1995 and 2000– Direct material coefficients
– Total material requirements and multipliers Multiplier for sector j (column sum of the weighted Total Requirements Matrix): total amount of material use in all sectors of the economy that is necessary for sector j‘s output to satisfy a Euro‘s worth of final demand.
• Amount, share and multipliers of resource use of the catagories of final demand
Analysing changes over time
Empirical Analysis
Andrea Stocker ConAccount Meeting, Zurich, 11-12 October, 2004 Page 10
Direct Material Use• Only a few sectors extract material directly
from nature– Agriculture and forestry – coal mining– ores mining– crude petroleum and natural gas– Natural stones, clay and grawel
• High import share (30 %)– In 1999 87 % of fossil materials were imported– Nevertheless only considering the domestic material
extraction, because an exact allocation of imported amounts is not possible.
Empirical Analysis
Andrea Stocker ConAccount Meeting, Zurich, 11-12 October, 2004 Page 11
Empirical Results
Direct resource use 1995 und 2000, amounts and intensities
2000Output
(prices 1995)
[1000 t] [%] [Mio. Euro]
Agriculture, forestry, fishing 34.050 27,71% 6.467,32 0,53Mining of coal and lignite 1.347 1,10% 50,42 2,67Crude petrol., natural gas, metal ores 4.653 3,79% 379,83 1,23Quarrying of natural stone 82.850 67,41% 1.121,74 7,39
Summe 122.900 100,00% 8.019,30 15,33
1995 Output
[1000 t] [%] [Mio. Euro]Agriculture, forestry, fishing 37.990 30,45% 5.803,65 0,48Mining of coal and lignite 1.250 1,00% 52,98 1,71Crude petrol., natural gas, metal ores 4.460 3,57% 200,72 1,61Quarrying of natural stone 81.080 64,98% 836,46 7,04
Summe 124.780 100,00% 6.893,82 18,10
Material input
Material input
Material coefficents
Material coefficents
Andrea Stocker ConAccount Meeting, Zurich, 11-12 October, 2004 Page 12
Empirical Results
Direct resource use 1995 und 2000, amounts
Materialinput in 1000t
0
10.000
20.000
30.000
40.000
50.000
60.000
70.000
80.000
90.000
Agriculture, forestry, fishing Mining of coal and lignite Crude petrol., natural gas, metal ores Quarrying of natural stone
1995
2000
Andrea Stocker ConAccount Meeting, Zurich, 11-12 October, 2004 Page 13
Direct resource use 1995 und 2000, intensities
Materialcoefficents
0,00
1,00
2,00
3,00
4,00
5,00
6,00
7,00
8,00
Agriculture, forestry, fishing Mining of coal and lignite Crude petrol., natural gas, metal ores Quarrying of natural stone
1995
2000
Empirical Results
Andrea Stocker ConAccount Meeting, Zurich, 11-12 October, 2004 Page 14
-10.000
0
10.000
20.000
30.000
40.000
50.000
60.000
70.000
80.000
90.00001
Ag
ricu
lture
,fo
rest
ry, f
ish
ing
10 M
inin
g o
fco
al a
nd
lig
nite
11 C
rud
ep
etro
leu
m,
nat
ura
l gas
,m
etal
ore
s
14 O
ther
min
ing
an
dq
uar
ryin
g
15 M
anu
fact
ure
of f
oo
dp
rod
uct
s an
db
ever
ages
26 M
anu
fact
ure
of o
ther
no
n-
met
allic
min
eral
pro
du
cts
45C
on
stru
ctio
n
70 R
eal e
stat
eac
tiviti
es
75 P
ub
licad
min
istr
atio
n;
com
pu
lso
ryso
cial
sec
uri
ty
Empirical results
Direct and total (direct + indirect) resource use 2000, amounts
direct
total (direct plus indirect)
Andrea Stocker ConAccount Meeting, Zurich, 11-12 October, 2004 Page 15
Empirical results
Direct and total (direct + indirect) resource use 2000, intensities
0
10
20
30
40
50
60
70
80
90
Agr
icul
ture
,fo
rest
ry, f
ishi
ng
Min
ing
of c
oal a
ndlig
nite
Cru
de p
etro
leum
,na
tura
l gas
, met
alor
es
Oth
er m
inin
g an
dqu
arry
ing
Ele
ctric
ity, g
as,
stea
m a
nd h
otw
ater
sup
ply
Land
tran
spor
t;tr
ansp
ort v
iapi
pelin
es
Con
stru
ctio
n
Sew
age
and
refu
sedi
spos
al,s
anita
tion
and
sim
ilar
act.
Act
iviti
es o
fm
embe
rshi
por
gani
zatio
nsn.
e.c.
Hea
lth a
nd s
ocia
lw
ork
Pos
t and
tele
-co
mm
unic
atio
ns
direct
total (direct plus indirect)
Andrea Stocker ConAccount Meeting, Zurich, 11-12 October, 2004 Page 16
Empirical results
Resource use, induced by final demand catagories
• Absolute amount and percentage of the catagories• Multipliers: how much tons of material input are allocated
to a catagory through 1 Mio. Euro‘s worth of this catagory
Final demand catagories DMI Percentage Multiplier DMI Percentage Multiplicator[1000 Tonnen] [%] [1000 t / Mio. € [1000 Tonnen] [%] [1000 t / Mio.€]
Private Consumption 38.571,58 30,91% 0,4573 36.707,21 29,87% 0,4352Governmental Cons. 8.390,82 6,72% 0,2314 8.864,53 7,21% 0,2445Dwellings 17.308,18 13,87% 1,9693 13.784,48 11,22% 1,5684Other buildings a. structures 21.448,79 17,19% 1,6582 21.188,69 17,24% 1,6381Machinery 762,73 0,61% 0,1243 868,44 0,71% 0,1415Transport equipment 68,71 0,06% 0,0468 80,87 0,07% 0,0551other Investments 231,20 0,19% 0,0645 918,41 0,75% 0,2563Exports 37.998,01 30,45% 0,5270 40.487,06 32,94% 0,5615Total 124.780,02 100,00% 0,6561 122.899,68 100,00% 0,5447
1995 2000
Andrea Stocker ConAccount Meeting, Zurich, 11-12 October, 2004 Page 17
Empirical Results
Total MI, induced by final demand catagories (amounts)
DMI in 1000t
0,00
5.000,00
10.000,00
15.000,00
20.000,00
25.000,00
30.000,00
35.000,00
40.000,00
45.000,00
PrivateConsumption
GovernmentalCons.
Dwellings Other buildings a.structures
Machinery Transportequipment
otherInvestments
Exports
1995
2000
Andrea Stocker ConAccount Meeting, Zurich, 11-12 October, 2004 Page 18
Governmental Consumption
7%Dwellings 11%
Other Buildings
18%
Privat Consumption
30%
Exports32%
Empirical Results
20001995
Other Buildings17%
Governmental Consumption
7%
Privat Consumption
31%
Exports30%
Dwellings14%
Total MI, induced by final demand catagories (share, %)
Andrea Stocker ConAccount Meeting, Zurich, 11-12 October, 2004 Page 19
Empirical Results
Total MI, induced by final demand catagories (Multipliers)
0,0000
0,5000
1,0000
1,5000
2,0000
2,5000
Pri
va
te C
on
su
mp
tio
n
Go
ve
rnm
en
tal C
on
s.
Dw
elli
ng
s
Oth
er
bu
ildin
gs
a.
str
uc
ture
s
Ma
ch
ine
ry
Tra
ns
po
rt e
qu
ipm
en
t
oth
er
Inv
es
tme
nts
Ex
po
rts
1995
2000
Andrea Stocker ConAccount Meeting, Zurich, 11-12 October, 2004 Page 20
Structural Decomposition Analysis (1)
• Which factors contribute how much to the total change in a specific variable in Austria?
• SDA is based on IO models and thus is able to distinguish different factors that influence total amounts as well as structure and intensity of material use.
• Decompose the absolute change in material use, separating
- technological effect (changes in resource
intensity)
- structural effect (change of Leontief Inverse).
- final demand effect (changes in final consumption)
Decomposition Analysis
Andrea Stocker ConAccount Meeting, Zurich, 11-12 October, 2004 Page 21
Structural Decomposition Analysis (2)• General form of SDA for two factors
• When should we measure ΔL and Δy?
Decomposition Analysis
tt xxx 1
yAIx 1)( Lyx
yLLyx
Andrea Stocker ConAccount Meeting, Zurich, 11-12 October, 2004 Page 22
Structural Decomposition Analysis (3)• Different possibilities:
Interaction
effect
Decomposition Analysis
yLLyx tt 1
yLLyx tt 1
yLyLLyx tt 11
yLyLLyx tt
Polar Decomposition
Methods
Andrea Stocker ConAccount Meeting, Zurich, 11-12 October, 2004 Page 23
Structural Decomposition Analysis (4)• Chosen Approach: Average of the polar
decompositions (Dietzenbacher and Los, 1998)- No interaction effects, order of occurence of effects
irrelevant
- Decomposition of methods with interaction effects show a relatively high share of these effects
• Definition of starting equation - Relation between resource use and IO analysis can be
achieved by expressing the resource use per unit of total output.
Decomposition Analysis
1ˆ'' xDMIm LymxmDMI ''
19952000 DMIDMIDMI
Andrea Stocker ConAccount Meeting, Zurich, 11-12 October, 2004 Page 24
Structural Decomposition Analysis (5)• First polar decomposition:
technology effect structural effect final demand
effect
• Second polar decomposition:
technology effect structural effect final demand effect
Decomposition Analysis
yLmLymyLm
DMI
200020001995200019951995 '''
yLmLymyLm
DMI
199519952000199520002000 '''
Andrea Stocker ConAccount Meeting, Zurich, 11-12 October, 2004 Page 25
Structural Decomposition Analysis (6)• Average of the two polar decomposition
methods:
Decomposition Analysis
)(5.0
)(5.0
)(5.0
1995199520002000
2000199519952000
1995199520002000
yLmyLm
LymLym
ymLymL
DMI
Andrea Stocker ConAccount Meeting, Zurich, 11-12 October, 2004 Page 26
Decomposition of DMI in Austria (1995 – 2000)
Material use 1995: 125 Mio t
2000: 123 Mio t
Change of Material use
Empirical Results
Effect [ 1000 t] [%]
Technology effect -21.410 1139%
Structural effect 4.048 -215%
Final demand effect 15.482 -823%
Total change of resource use -1.880 100%
Andrea Stocker ConAccount Meeting, Zurich, 11-12 October, 2004 Page 27
Decomposition of DMI in Austria (1995 – 2000), 1000 t
Empirical Results
-25.000
-20.000
-15.000
-10.000
-5.000
0
5.000
10.000
15.000
20.000
Technology effect Structural effect Final demand effect Total change ofresource use
Andrea Stocker ConAccount Meeting, Zurich, 11-12 October, 2004 Page 28
Decomposition, sectoral results in 1000 t (1995 – 2000)
-8.000
-6.000
-4.000
-2.000
0
2.000
4.000
6.000
8.000
10.000
01 Agriculture,
forestry, fishing
10 Minin
g of coal
and lignite
14 Other m
iningand quarrying
15 Food products
and beverages
24 Chem
icals andchem
icalproducts
26 Other non-
metallic m
ineral
products
40 Electricity, gas,steam
,hot w
atersupply
45 Construction
60 Land transport;
transport viapip
elines
70 Real estate
activities
Structural effect
Final demand effect
Technology effect
Total change
Andrea Stocker ConAccount Meeting, Zurich, 11-12 October, 2004 Page 29
Conclusions
• Decomposition is a powerful tool to show to which extent underlying causes contribute to the observed overall change of a given variable.
• The resource use has decreased from 1995 to 2000 by about 2 Mio. tons.
• Much reduction has been achieved by decreasing the material use per unit of output (decreasing the material intensity)
• Since only domestic resource extraction is considered, the analysis does not provide a comprehensive picture of the Austrian resource use.