"A fundamental question the Resource Panel hence has to answer is how different economic activities influence the use of natural resources and the generation of pollution. To answer this basic question, the report assesses economic activities and identifies priorities according to their environmental impact and resource demands. The assessment was based on a broad review and comparison of existing studies and literature that analyzes impacts of production, consumption, or resource use of countries, country groups, or the world as a whole."--P.2.

Achieving a truly sustainable energy transition requires progress across multiple dimensions beyond climate change mitigation goals. This article reviews and synthesizes results from disparate strands of literature on the coeffects of mitigation to inform climate policy choices at different governance levels. The literature documents many potential cobenefits of mitigation for nonclimate objectives, such as human health and energy security, but little is known about their overall welfare implications. Integrated model studies highlight that climate policies as part of well-designed policy packages reduce the overall cost of achieving multiple sustainability objectives. The incommensurability and uncertainties around the quantification of coeffects become, however, increasingly pervasive the more the perspective shifts from sectoral and local to economy wide and global, the more objectives are analyzed, and the more the results are expressed in economic rather than nonmonetary terms. Different strings of evidence highlight the role and importance of energy demand reductions for realizing synergies across multiple sustainability objectives.

Global production chains carry environmental and socioeconomic impacts embodied in each traded good and service. Even though labor and energy productivities tend to be higher for domestic production in high-income countries than those in emerging economies, this difference is significantly reduced for consumption, when including imported products to satisfy national demand. The analysis of socioeconomic and environmental aspects embodied in consumption can shed a light on the real level of productivity of an economy, as well as the effects of rising imports and offshoring. This research introduces a consumption-based metric for productivity, in which we evaluate the loss of productivity of developed nations resulting from imports from less-developed economies and offshoring of labor-intensive production. We measure the labor, energy, and greenhouse gas emissions footprints in the European Union's trade with the rest of the world through a multiregional input-output model. We confirm that the labor footprint of European imports is significantly higher than the one of exports, mainly from low-skilled, labor-intensive primary sectors. A high share of labor embodied in exports is commonly associated with low energy productivities in domestic industries. Hence, this reconfirms that the offshoring of production to cheaper and low-skilled, labor-abundant countries offsets, or even reverts, energy efficiency gains and climate-change mitigation actions in developed countries.

The investment in capital goods is a well-known driver of economic activity, associated resource use, and environmental impact. In national accounting, gross fixed capital formation (GFCF) constitutes a substantial share of the total final demand of goods and services, both in terms of monetary turnover and embodied resources. In this article, we study the structure of GFCF and the environmental impacts associated with it on a global scale, and link it to measures of development. We find that the share of GFCF as part of the total carbon footprint (CF) varies more across countries than GFCF as a share of gross domestic product (GDP). Countries in early phases of development generally tend to invest in resource-intensive assets, primarily infrastructure and machinery, whereas wealthier countries invest in less resource-intensive assets, such as computers, software, and services. By performing a structural decomposition analysis, we assess the relative importance of investment structure and input-output multipliers for the difference in carbon intensity of capital assets, and find that the structure of investments plays a larger role for less-developed countries than for developed countries. We find a relative decoupling of the CF of GFCF from GDP, but we can neither confirm nor rule out the possibility of an absolute decoupling.

China's remarkable economic growth in the last 3 decades has brought about big improvements in quality of life while simultaneously contributing to serious environmental problems. The aim of all economic activities is, ultimately, to provide the population with products and services. Analyzing environmental impacts of consumption can be valuable for illuminating underlying drivers for energy use and emissions in society. This study applies an environmentally extended input-output analysis to estimate household environmental impact (HEI) of urban Beijing households at different levels of development. The analysis covers direct and indirect energy use and emissions of carbon dioxide (CO), sulfur dioxide (SO), and nitrogen oxide (NO). On the basis of observations of how HEI varies across income groups, prospects for near-future changes in HEI are discussed. Results indicate that in 2007, an urban resident in Beijing used, on average, 52 gigajoules of total primary energy supply. The corresponding annual emissions were 4.2 tonnes CO, 27 kilograms SO, and 17 kilograms NO. Of this, only 18% to 34% was used or emitted by the households directly. While the overall expenditure elasticity of energy use is around 0.9, there is a higher elasticity of energy use associated with transport. The results suggest that significant growth in HEI can be expected in the near future, even with substantial energy efficiency improvements.

Industrial assets or fixed capital stocks are at the core of the transition to a low-carbon economy. They represent substantial accumulations of capital, bulk materials, and critical metals. Their lifetime determines the potential for material recycling and how fast they can be replaced by new, more efficient facilities. Their efficiency determines the coupling between useful output and energy and material throughput. A sound understanding of the economic and physical properties of fixed capital stocks is essential to anticipating the long-term environmental and economic consequences of the new energy future. We identify substantial overlap in the way stocks are modeled in national accounting, dynamic material flow analysis, dynamic input-output (I/O) analysis, and life cycle assessment (LCA) and we merge these concepts into a common framework for modeling fixed capital stocks. We demonstrate the usefulness of the framework for simultaneous accounting of capital and material stocks and for consequential LCA. We apply the framework to design a demand-driven dynamic I/O model with dynamic capital stocks, and we synthesize both the marginal and attributional matrix of technical coefficients (A-matrix) from detailed process inventories of fixed assets of different age cohorts and technologies. The stock modeling framework allows researchers to identify and exploit synergies between different model families under the umbrella of socioeconomic metabolism.

This article extends and applies the world trade model with bilateral trade (WTMBT), a linear program with any number of goods, factors, and regional trade partners that determines regional production, bilateral trade patterns, and region-specific prices on the basis of comparative advantage by minimizing factor use. The model provides a consistent analysis of the global production system, representing geographical location at a regional level, region-specific technologies at a sector level, emissions from production, and resource constraints and costs. An illustrative analysis investigates how changes in the geographic distribution of production could contribute to reducing global carbon dioxide (CO) emissions and at what cost. The model provides a bridge between global objectives and their determinants and consequences in specific sectors in individual regions. Multi-objective analysis is used to construct a trade-off curve between global factor costs and CO emissions. The relevance of both primal and dual solution variables is demonstrated. In particular, changes in goods prices and emissions are investigated. We conclude that the main impact of tightening carbon constraints is a substantial reduction in international trade accompanied by a shift away from regions most reliant on the combustion of coal. In addition to the analysis of the overall global trends, including the impact on prices, the implications of the global carbon constraint for one specific industry are investigated.

Carbon footprints aim to engage consumers in contributing to climate-change mitigation. Consumption-oriented policy measures attempt to cause voluntary or incentivized interventions that reduce environmental impact through the supply chain by utilizing demand drivers. A large body of life cycle assessment studies describe how specific actions can reduce the environmental footprint of an individual or household. However, these assessments are often conducted with a narrow focus on particular goods and processes. Here, we formalize a counterfactual method and operational tool for scoping the potential impact of such actions, focusing on economy-wide impact. This “quickscan” tool can model shifts and reductions in demand, rebound effects (using marginal expenditure), changes in domestic and international production recipes, and reductions in the environmental intensity of production. This tool provides quick, macro-level estimates of the efficacy of consumer-oriented policy measures and can help to prioritize relevant policies. We demonstrate the method using two case studies on diet and clothing using the EXIOBASE3 multiregional input-output database, giving spatially explicit information on where environmental impact reductions of the interventions occur, and where impacts may increase in the case of rebounds.