Identifying the Role of Final Consumption in Structural Path Analysis: An Application to Water Uses

The complexity of the connections within an economic system can only be reliably reflected in academic research if powerful methods are used. Researchers have used structural path analysis (SPA) to capture not only the linkages within the production system but also the propagation of the effects into different channels of impacts. However, the SPA literature has restricted itself to showing the relations among sectors of production, while the connections between these sectors and final consumption have attracted little attention. In order to consider the complete set of channels involved, in this paper we propose a structural path method that endogenously incorporates not only sectors of production but also the final consumption of the economy. The empirical application comprises water usages, and analyses the dissemination of exogenous impacts into various channels of water consumption. The results show that the responsibility for water stress is imputed to different sectors and depends on the hypothesis used for the role played by final consumption in the model. This highlights the importance of consumers' decisions in the determination of ecological impacts.

[1]  Ronald E. Miller.  The Relationship between Type I and Type II Income Multipliers in an Input-Output Model: A Comment , 1980 .

[2]  Manfred Lenzen,et al.  Environmentally important paths, linkages and key sectors in the Australian economy , 2003 .

[3]  W. Leontief.  Environmental Repercussions and the Economic Structure: An Input-Output Approach , 1970 .

[4]  M. Llop.  Water reallocation in the input–output model , 2013 .

[5]  Manfred Lenzen,et al.  A Generalized Input-Output Multiplier Calculus for Australia , 2001 .

[6]  Manfred Lenzen,et al.  Structural path decomposition , 2009 .

[7]  K. E. Boulding,et al.  The structure of American economy, 1919-1929 : an empirical application of equilibrium analysis , 1942 .

[8]  Douglas Crawford-Brown,et al.  Mapping flows of embodied emissions in the global production system. , 2011, Environmental science & technology.

[9]  Matthias Schroder,et al.  Input–Output Analysis , 2011 .

[10]  J. Lopes,et al.  Complexity as Interdependence in Input–Output Systems , 2007 .

[11]  M. Lenzen,et al.  A consistent input–output formulation of shared producer and consumer responsibility , 2005 .

[12]  O. Dubois,et al.  The state of the world's land and water resources for food and agriculture: managing systems at risk. , 2011 .

[13]  W. Leontief,et al.  The structure of American economy, 1919-1929 : an empirical application of equilibrium analysis , 1942 .

[14]  T. Mattila.  Any sustainable decoupling in the Finnish economy? A comparison of the pathways and sensitivities of GDP and ecological footprint 2002–2005 , 2012 .

[15]  H. Turral,et al.  The state of the world's land and water resources for food and agriculture : managing systems at risk , 2011 .

[16]  Manfred Lenzen,et al.  Structural path analysis of ecosystem networks , 2007 .

[17]  Jacques Defourny,et al.  STRUCTURAL PATH ANALYSIS AND MULTIPLIER DECOMPOSITION WITHIN A SOCIAL ACCOUNTING MATRIX FRAMEWORK , 1984 .

[18]  G. Peters.  From production-based to consumption-based national emission inventories , 2008 .

[19]  H. S. Matthews,et al.  THE ROLE OF INPUT–OUTPUT ANALYSIS FOR THE SCREENING OF CORPORATE CARBON FOOTPRINTS , 2009 .

[20]  Michael Sonis,et al.  Economic complexity as network complication: Multiregional input-output structural path analysis , 1998 .

[21]  Manfred Lenzen,et al.  CO2 Multipliers in Multi-region Input-Output Models , 2004 .

[22]  Maria Llop,et al.  Economic structure and pollution intensity within the environmental input-output framework , 2007 .

[23]  T. Wiedmann.  A review of recent multi-region input–output models used for consumption-based emission and resource accounting , 2009 .

[24]  A. Muñiz.  Input–output research in structural equivalence: Extracting paths and similarities , 2013 .

[25]  B. Bates,et al.  Climate change and water. , 2008 .

[26]  Fidel Aroche-Reyes,et al.  A qualitative input-output method to find basic economic structures , 2003 .

[27]  Graham Pyatt,et al.  Accounting and Fixed Price Multipliers in a Social Accounting Matrix , 1979 .

[28]  Blanca Gallego,et al.  Atmospheric Emissions and Structural Path Analysis in the Spanish Economy , 2011 .

[29]  Manfred Lenzen,et al.  A guide for compiling inventories in hybrid life-cycle assessments: some Australian results , 2002 .

[30]  Manfred Lenzen,et al.  Conceptualising environmental responsibility , 2010 .

[31]  M. Llop,et al.  Composition of greenhouse gas emissions in Spain: An input–output analysis , 2007 .

[32]  J. Mihelcic,et al.  Embodied energy comparison of surface water and groundwater supply options. , 2011, Water research.

[33]  Michael Sonis,et al.  Block Structural Path Analysis: Applications to Structural Changes in the Indonesian Economy , 1997 .

[34]  B. Bates,et al.  Climate Change and Water: Technical Paper VI , 2008 .

[35]  Manfred Lenzen,et al.  A comparative study of some environmental impacts of conventional and organic farming in Australia , 2006 .