Accounting for Raw Material Embodied in Imports by Multi-regional Input-Output Modelling and Life Cycle Assessment, Using Finland as a Study Case

Abstract The two main methods used to estimate raw material embodied in imports are life cycle assessment (LCA) and multi-regional input-output (MRIO) models. The key advantage of LCA is its higher product resolution but it relies on global or regional averages, which could bias results. Our outcomes suggest that this obstacle could be avoided for primary goods if domestic process data are collected, since the necessary raw materials are mostly extracted from the environment of the direct trade partner. Conversely, for many other products, intermediate inputs are produced following a wide range of blueprints and cross multiple borders, which makes it challenging to determine how and where raw materials needed for their production originate. For these products, a method to combine the superior coverage of MRIO with the product resolution of LCA is evaluated here, using imports to Finland as a study case. The analysis provides insights on how to identify critical supply chains and illustrates a relatively simple, replicable solution that can be used in other regions or environmental accounts. Nevertheless, the existing resolution of MRIO models and dissimilarities in classifications between the two tools could constitute a new source of errors if not properly handled.

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