Method for endogenizing capital in the United States Environmentally‐Extended Input‐Output model

Abstract

Each year businesses, governments, and homeowners in the United States invest around one fifth of gross domestic product into the creation of capital assets such as buildings, machinery, and software to enable production and consumption. Use of capital is typically included to some extent in environmental life cycle assessments of goods and services but is not incorporated into most environmentally extended input‐output (EEIO) models, including the US Environmental Protection Agency's USEEIO. Capital assets are typically created in years prior to their use, so a challenge lies in distributing the impacts of their creation over time. In this work, a highly detailed capital flow matrix approach is followed to distribute the use of fixed capital assets to consuming industries. Data from the US Bureau of Economic Analysis's Fixed Asset Accounts is merged with its Industry Accounts data by the creation of concordance tables. Public highways and streets are partially reallocated to industries operating vehicles. The resulting capital use matrix is later combined into a modified USEEIO. “Housing” is found to be the largest consumer of fixed assets, followed by general government, fossil fuel extraction, and financial industries involved in leasing. Construction, vehicles, and machinery are mostly used by industries in the form of fixed assets. The types of fixed assets used by industries are consistent with expectations: housing is dominated by structures, transport by equipment, and information industries by intellectual property products.

Correcting remaining truncations in hybrid life cycle assessment database compilation

“…The endogenization of capital goods in IO is seldom applied due to the lack of data on capital usage by industries. Nevertheless, taking advantage of a recent surge in its application at national and global scales (Chen et al., 2018; Miller et al., 2019; Södersten et al., 2018), we are now able to address the following research questions. How can endogenization of capital goods be integrated in a streamlined hybridization framework?…”

Copper Recycling Flow Model for the United States Economy: Impact of Scrap Quality on Potential Energy Benefit

“…A large portion of copper final demand was used as investment in products with long life spans. For example, the lifespan of infrastructure and transport was estimated to be approximately 50 years and 20 years, respectively, 49 with the annual growth rates comparable to the gross domestic product growth rates. 3 Improved material efficiency could reduce future copper demand.…”

“…The technical coefficient matrix A and the final demand matrix y from the most recent US IO table, the 2012 USEEIO table, , was used in this paper. Based on the degree of fabrication, economic sectors are categorized as “resources,” “materials,” or “products” following the WIO-MFA procedure. , …”

Implications of the distribution of German household environmental footprints across income groups for integrating environmental and social policy design

“…Although the household CF share from housing and services is relatively low (Figure 4), the CF of their capital formation is significant, at more than 25% of the total capital formation CF (Södersten, Wood, & Hertwich, 2018a). Employing capital‐embodied MRIO tables assesses total household EnvFs more comprehensively (Berrill, Miller, Kondo, & Hertwich, 2020; Chen et al., 2018; Font Vivanco, 2019; Miller et al., 2019). Inducing previous consumptions of fixed capital into the interindustry matrix results in 11% increase in the global GHG emissions embodied in the final consumption (Södersten, Wood, & Hertwich, 2018b).…”