The Employment Footprints of Nations

In this study, we present an analysis of the average wages paid for producing direct and indirect imports of nations using employment and income footprints. An employment footprint includes a country's domestic employment and that occurring along the supply chains of, and hence embodied in, its imported goods and services. Our results allow us to group the world's nations into “masters” that enjoy a lifestyle supported by workers in other countries and “servants” that support the lifestyle of master countries. We show that, in 2010, employment footprints of countries differed substantially from their own workforce footprints. Hong Kong, Singapore, the United Arab Emirates, and Switzerland occupy the top‐ranking positions of master countries, whereas many African and Asian countries are servants. Our findings show that the commodities that are “servant intensive,” such as electronics, agricultural products, and chemicals, tend to have complex supply chains often originating in third‐world countries. The quantification of these master‐servant relationships and the exposing of implicated supply chains could be of benefit to those concerned with their corporate social responsibility and committed to fairer trading or those developing policy around fair globalization.     

Unraveling the Nexus: Exploring the Pathways to Combined Resource Use

In response to the unprecedented decline in global natural resource endowments, the so‐called nexus framework is gaining increasing influence on resource management practices. In this research, we approach the resource nexus through the concept of nexus pathways. Nexus pathways are configurations that resource flows follow along supply chains leading to the combined use of two or more resources. Three general types of pathways are identified: direct (on‐site use), dependent (one‐way supply chains), and interdependent (supply‐chain feedbacks). We quantify and compare each pathway by means of multiregional input‐output analysis and structural path analysis, and apply this approach to a comparative case study on the water‐energy nexus (WEN) in the United States and China. Interdependencies or feedbacks are generally thought to be relevant for the WEN, especially between water and energy sectors. Our economy‐wide analysis for both countries indicates, however, that feedbacks neither play an important role in the WEN nor substantially take place between water and energy sectors. The most important feedbacks contribute to less than 1% of total resource use, and these take place mostly between manufacturing sectors. Overall, the studied WEN is mostly driven by dependent pathways and, to a lesser degree, direct resource use. Comparative differences between the two countries are largely explained by differences in economic structure, technology, and resource endowments. Our findings call into question current research and policy focus and suggest greater attention to less complex, but more determining, pathways leading to absolute resource use.     

Investigating fairness in global supply chains: applying an extension of the living wage to the Western European clothing supply chain

Purpose

This paper explores the issue of fairness in global supply chains. Taking the Western European clothing supply chain as a case study, we demonstrate how applying a normative indicator in Social Life Cycle Assessment (SLCA) can contribute academic and practical insights into debates on fairness. To do so, we develop a new indicator that addresses some of the limitations of the living wage for SLCA.

Methods

We extend the standard form of living wage available for developing countries to include income tax and social security contributions. We call this extension ‘living labour compensation’. Using publically available data, we estimate net living wages, gross living wages, and living labour compensation rates for Brazil, Russia, India, and China (BRIC) in 2005. We then integrate living labour compensation rates into an input-output framework, which we use to compare living labour compensation and actual labour compensation in the BRIC countries in the Western European clothing supply chain in 2005.

Results and discussion

We find that in 2005, actual labour compensation in the Western European clothing supply chain was around half of the living labour compensation level, with the greatest difference being in the Agricultural sector. Therefore, we argue that BRIC pay in the Western European clothing supply chain was unfair. Furthermore, our living labour compensation estimates for BRIC in 2005 are ~ 35% higher than standard living wage estimates. Indeed, adding income taxes and employee social security contributions alone increases the living wage by ~ 10%. Consequently, we argue there is a risk that investigations based on living wages are not using a representative measure of fairness from the employee’s perspective and are substantially underestimating the cost of living wages from an employer’s perspective. Finally, we discuss implications for retailers and living wage advocacy groups.

Conclusions

Living labour compensation extends the living wage, maintaining its strengths and addressing key weaknesses. It can be estimated for multiple countries from publically available data and can be applied in an input-output framework. Therefore, it is able to provide a normative assessment of fairness in complex global supply chains. Applying it to the Western European clothing supply chain, we were able to show that pay for workers in Brazil, Russia, India, and China is unfair, and draw substantive conclusions for practice.

     

Effects of Using Heterogeneous Prices on the Allocation of Impacts from Electricity Use: A Mixed‐Unit Input‐Output Approach

Economic input‐output life cycle assessment (IO‐LCA) models allow for quick estimation of economy‐wide greenhouse gas (GHG) emissions associated with goods and services. IO‐LCA models are usually built using economic accounts and differ from most process‐based models in their use of economic transactions, rather than physical flows, as the drivers of supply‐chain GHG emissions. GHG emissions estimates associated with input supply chains are influenced by the price paid by consumers when the relative prices between individual consumers are different. We investigate the significance of the allocation of GHG emissions based on monetary versus physical units by carrying out a case study of the U.S. electricity sector. We create parallel monetary and mixed‐unit IO‐LCA models using the 2007 Benchmark Accounts of the U.S. economy and sector specific prices for different end users of electricity. This approach is well suited for electricity generation because electricity consumption contributes a significant share of emissions for most processes, and the range of prices paid by electricity consumers allows us to explore the effects of price on allocation of emissions. We find that, in general, monetary input‐output models assign fewer emissions per kilowatt to electricity used by industrial sectors than to electricity used by households and service sectors, attributable to the relatively higher prices paid by households and service sectors. This fact introduces a challenging question of what is the best basis for allocating the emissions from electricity generation given the different uses of electricity by consumers and the wide variability of electricity pricing.     

Better Global Assessment of Worker Inequality: Comment on “The Employment Footprints of Nations”

This commentary responds to the previously published Journal of Industrial Ecology article “The Employment Footprints of Nations: Uncovering Master‐Servant Relationships” by Alsamawi and colleagues. Their article uses extended input‐output analysis to calculate employment and income footprints and, consequently, quantifies and provides an analysis of the average wages embodied in consumption of countries in comparison with the wages received by domestic workers. In effect, Alsamawi and colleagues show the extent of inequality in labor income, especially between developed and developing economies, traced throughout the global supply chains, but ignore the price differentials existing between countries in their discussion of the welfare implications of global trade on workers. This commentary contends the appropriateness of adjusting nominal compensation of workers to purchasing power parity (PPP) when undertaking global comparisons that pertain to well‐being and recalculates the employment footprints and income footprints of nations with PPP adjustment. The price adjustment in this work is intended to show a more accurate depiction of the disparity among workers of different nations when their labor incomes are deflated by the index price of consumption goods in their country. Using observations covering 189 countries and 14,839 sectors for the period 1990–2011, the results of the adjustment reveal that the ratio of domestic wages to foreign wages paid in support of a country's consumption (footprint wages) tends to be underestimated for labor‐exporting countries (developing economies with relatively cheaper consumption goods) and overestimated for labor‐importing countries (developed economies with more expensive consumption goods), thus demonstrating, generally, relatively less income inequality than previously exposed.     

Corporate and Product Carbon Footprint under Compound Hybrid Analysis: Application to a Spanish Timber Company

The European Union (EU) is advancing steadily toward the stabilization of atmospheric greenhouse gas concentrations. Various sectors are now obliged to make reductions, and new policies based on the carbon footprint are being encouraged. However, voluntary reporting of so‐called scope 3 emissions is hindering successful implementation of these policies. In this study, we present a tiered hybrid analysis to report emissions according to the ISO/TR 14069 standards and to obtain complete measures of scope 3 emissions. A process analysis for scope 1 and scope 2 emissions is complemented with a multiregional input‐output analysis for upstream scope 3 emissions. This novel approach is applied to the case study of a Spanish timber company. Its total carbon footprint in 2011 was 783,660 kilograms of carbon‐dioxide equivalent, of which 88% correspond to scope 3 emissions. These emissions are globally distributed; 71% are from European countries, followed by 8% from emerging economies (Brazil, Russia, India, Indonesia, Australia, and Turkey), 5% from China, and, finally, 16% from the rest of the world. We identify and discuss the advantages and disadvantages of this novel approach, the European implementation of which could be highly effective in reducing global carbon emissions.     

Insights on the Use of Hybrid Life Cycle Assessment for Environmental Footprinting

Establishing a comprehensive environmental footprint that indicates resource use and environmental release hotspots in both direct and indirect operations can help companies formulate impact reduction strategies as part of overall sustainability efforts. Life cycle assessment (LCA) is a useful approach for achieving these objectives. For most companies, financial data are more readily available than material and energy quantities, which suggests a hybrid LCA approach that emphasizes use of economic input‐output (EIO) LCA and process‐based energy and material flow models to frame and develop life cycle emission inventories resulting from company activities. We apply a hybrid LCA framework to an inland marine transportation company that transports bulk commodities within the United States. The analysis focuses on global warming potential, acidification, particulate matter emissions, eutrophication, ozone depletion, and water use. The results show that emissions of greenhouse gases, sulfur, and particulate matter are mainly from direct activities but that supply chain impacts are also significant, particularly in terms of water use. Hotspots were identified in the production, distribution, and use of fuel; the manufacturing, maintenance, and repair of boats and barges; food production; personnel air transport; and solid waste disposal. Results from the case study demonstrate that the aforementioned footprinting framework can provide a sufficiently reliable and comprehensive baseline for a company to formulate, measure, and monitor its efforts to reduce environmental impacts from internal and supply chain operations.     

Potential net primary production footprint of agriculture: A global trade analysis

Agriculture is one of the most important sources of biomass for human society but increasingly contributes to anthropogenic degradation of ecosystems through negative impacts on biodiversity, ecosystem integrity, climate change, and ecosystem services. Here we estimate NPP_pot agricultural footprint, that is, the level of appropriation of potential net primary production (NPP_pot) by global cropland and human‐made pastures from the consumer responsibility (footprint) perspective and reveal the role of international trade. To quantify the NPP_pot agricultural footprint, we utilize environmentally extended multi‐regional input–output analysis to attribute the terrestrial potential NPP altered by global cropland and human‐made pastures to the final consumers responsible for pulling the supply chains. We identify the NPP_pot of geographically specific cropland area of 186 agricultural crops in 236 countries and we track each of those crops through the global web of international trade and supply chains to the point of final consumption. We show that human society appropriates 20% (13 petagrams of carbon per year) of global potential net primary production by the transformation of natural ecosystems into cropland and human‐made pastures. International trade accounts for 23% of global NPP_pot footprint of agriculture. While the two and half billion people living in China and India (the two countries with lowest NPP_pot agricultural footprint per capita) appropriate about 16% of the global NPP_pot agricultural footprint of cropland and human‐made pastures, the same share is appropriated by only 360 million people living in countries with the highest per capita footprint.     

Linking a farm model and a location optimization model for evaluating energetic and material straw valorization pathways—A case study in Baden‐Wuerttemberg

Diminishing fossil carbon resources, global warming, and increasing material and energy needs urge for the rapid development of a bioeconomy. Biomass feedstock from agro‐industrial value chains provides opportunities for energy and material production, potentially leading to competition with traditional food and feed production. Simulation and optimization models can support the evaluation of biomass value chains and identify bioeconomy development paths, potentials, opportunities, and risks. This study presents the linkage of a farm model (EFEM) and a techno‐economic location optimization model (BIOLOCATE) for evaluating the straw‐to‐energy and the innovative straw‐to‐chemical value chains in the German federal state of Baden‐Wuerttemberg taking into account the spatially distributed and price‐sensitive nature of straw supply. The general results reveal the basic trade‐off between economies of scale of the energy production plants and the biorefineries on the one hand and the feedstock supply costs on the other hand. The results of the farm model highlight the competition for land between traditional agricultural biomass utilization such as food and feed and innovative biomass‐to‐energy and biomass‐to‐chemical value chains. Additionally, farm‐modeling scenarios illustrate the effect of farm specialization and regional differences on straw supply for biomass value chains as well as the effect of high straw prices on crop choices. The technological modeling results show that straw combustion could cover approximately 2% of Baden‐Wuerttemberg's gross electricity consumption and approximately 35% of the district heating consumption. The lignocellulose biorefinery location and size are affected by the price sensitivity of the straw supply and are only profitable for high output prices of organosolv lignin. The location optimization results illustrate that economic and political framework conditions affect the regional distribution of biomass straw conversion plants, thus favoring decentralized value chain structures in contrast to technological economies of scale.     

A Hybrid‐Unit Energy Input‐Output Model to Evaluate Embodied Energy and Life Cycle Emissions for China's Economy

We develop a hybrid‐unit energy input‐output (I/O) model with a disaggregated electricity sector for China. The model replaces primary energy rows in monetary value, namely, coal, gas, crude oil, and renewable energy, with physical flow units in order to overcome errors associated with the proportionality assumption in environmental I/O analysis models. Model development and data use are explained and compared with other approaches in the field of environmental life cycle assessment. The model is applied to evaluate the primary energy embodied in economic output to meet Chinese final consumption for the year 2007. Direct and indirect carbon dioxide emissions intensities are determined. We find that different final demand categories pose distinctive requirements on the primary energy mix. Also, a considerable amount of energy is embodied in the supply chain of secondary industries. Embodied energy and emissions are crucial to consider for policy development in China based on consumption, rather than production. Consumption‐based policies will likely play a more important role in China when per capita income levels have reached those of western countries.     

The Inequality Footprints of Nations: A Novel Approach to Quantitative Accounting of Income Inequality

In this study we use economic input-output analysis to calculate the inequality footprint of nations. An inequality footprint shows the link that each country''s domestic economic activity has to income distribution elsewhere in the world. To this end we use employment and household income accounts for 187 countries and an historical time series dating back to 1990. Our results show that in 2010, most developed countries had an inequality footprint that was higher than their within-country inequality, meaning that in order to support domestic lifestyles, these countries source imports from more unequal economies. Amongst exceptions are the United States and United Kingdom, which placed them on a par with many developing countries. Russia has a high within-country inequality nevertheless it has the lowest inequality footprint in the world, which is because of its trade connections with the Commonwealth of Independent States and Europe. Our findings show that the commodities that are inequality-intensive, such as electronic components, chemicals, fertilizers, minerals, and agricultural products often originate in developing countries characterized by high levels of inequality. Consumption of these commodities may implicate within-country inequality in both developing and developed countries.     

Evaluating the impacts of wood production and trade on bird extinction risks

Biodiversity loss can be accelerated by human consumption in regions that are far removed from habitat degradation because of economic globalization, but no study has directly quantified the effects of global trade on extinction risks at a global scale with consideration for species differences. We propose a novel biodiversity footprint index based on bird extinction risks to evaluate the effects of global wood production and trade on biodiversity. Using 536 endangered bird species threatened by wood harvesting and logging, we calculated the “quasi-extinction” probabilities, that is, the probabilities that population sizes become lower than an extinction threshold after habitat loss based on initial population sizes and forest habitat loss rates. We then used bilateral wood trade data to link the biodiversity impacts in wood exporters to wood importers. We found that if recent trends in forest cover loss continue until 2100, bird species in Brazil would be the most rapidly and heavily affected by wood production and trade, followed by those in Indonesia; these two countries alone would account for about half of all global bird extinctions. Large-scale wood importers (i.e., China, Japan, and the United States) significantly elevate overseas extinction risks and, simultaneously, reduce domestic impacts, indicating a heavy responsibility of these countries for global biodiversity loss. We also conducted a scenario analysis, which showed that the total projected number of extinct species would not decrease if each country produced the amount of wood materials necessary to meet current consumption levels. This is because bird extinction risks in tropical wood importers, such as Mexico and the Philippines, as well as Japan and China will increase if these countries increase domestic wood production. Our biodiversity footprint index is useful to identify countries whose bird species are highly affected by wood production and trade, and to quantify the role of wood trade in bird species extinctions. Additional scenario analyses are needed to establish effective patterns of wood production and consumption for bird biodiversity conservation.     

Environmental Footprints and Scenario Analysis for Assessing the Impacts of the Agri‐Food Industry on a Regional Economy: A Case Study in Spain

The study of the environmental footprints of various sectors and industries is increasingly demanded by institutions and by society. In this context, the regional perspective is becoming particularly important, and even more so in countries such as Spain, where the autonomous communities have the primary responsibility for implementing measures to combat environmental degradation and promote sustainable development, in coordination with national strategies. Taking as a case study a Spanish region, Aragon, and significant economic sectors, including agriculture and the food industry, the aim of this work is twofold. First, we calculate the associated environmental footprints (of emissions and water) from the dual perspectives of production (local impacts) and consumption (final destination of the goods produced by the agri‐food industry). Second, through a scenarios analysis, based on a general equilibrium model designed and calibrated specifically for the region, we evaluate the environmental implications of changes in the agri‐food industry (changes in the export and import pattern, as well as in consumer behavior). This model provides a flexible approximation to the environmental impacts, controlling for a wider range of behavioral and economic interactions. Our results indicate that the agri‐food industry has a significant impact on the environment, especially on water resources, which must be responsibly managed in order to maintain the differential advantage that a regional economy can have, compared to other territories.     

From Food Insufficiency towards Trade Dependency: A Historical Analysis of Global Food Availability

Achieving global food security is one of the major challenges of the coming decades. In order to tackle future food security challenges we must understand the past. This study presents a historical analysis of global food availability, one of the key elements of food security. By calculating national level dietary energy supply and production for nine time steps during 1965–2005 we classify countries based on their food availability, food self-sufficiency and food trade. We also look at how diets have changed during this period with regard to supply of animal based calories. Our results show that food availability has increased substantially both in absolute and relative terms. The percentage of population living in countries with sufficient food supply (>2500 kcal/cap/d) has almost doubled from 33% in 1965 to 61% in 2005. The population living with critically low food supply (<2000 kcal/cap/d) has dropped from 52% to 3%. Largest improvements are seen in the MENA region, Latin America, China and Southeast Asia. Besides, the composition of diets has changed considerably within the study period: the world population living with high supply of animal source food (>15% of dietary energy supply) increased from 33% to over 50%. While food supply has increased globally, food self-sufficiency (domestic production>2500 kcal/cap/d) has not changed remarkably. In the beginning of the study period insufficient domestic production meant insufficient food supply, but in recent years the deficit has been increasingly compensated by rising food imports. This highlights the growing importance of food trade, either for food supply in importing countries or as a source of income for exporters. Our results provide a basis for understanding past global food system dynamics which, in turn, can benefit research on future food security.     

Accounting for Emissions and Sinks from the Biogeochemical Cycle of Carbon in the U.S. Economic Input‐Output Model

Biogeochemical cycles are essential ecosystem services that continue to degrade as a result of human activities, but are not fully considered in efforts toward sustainable engineering. This article develops a model that integrates the carbon cycle with economic activities in the 2002 U.S. economy. Data about the carbon cycle, including emissions and sequestration flows, is obtained from the greenhouse gas inventory of the U.S. Environmental Protection Agency. Economic activities are captured by the economic input‐output model available from the Bureau of Economic Analysis. The resulting model is more comprehensive in its accounting for the carbon cycle than existing methods for carbon footprint (CF) calculations. Examples of unique flows in this model include the effect of land‐use and land‐cover change on carbon dioxide flow within the U.S. national boundary, carbon sequestration in urban trees, and emissions resulting from liming. This model is used to gain unique insight into the carbon profile of U.S. economic sectors by providing the life cycle emissions and sequestration in each sector. Such insight may be used to support policies, manage supply chains, and be used for more comprehensive CF calculations.     

When Do Allocations and Constructs Respect Material,Energy, Financial,and Production Balances in LCA and EEIO?

Conservation of mass and energy are essential to physical accounting, just as price and market balances are essential to economic accounting. These principles guide data collection and inventory compilation in industrial ecology. The resulting balanced surveys, however, can rarely be used directly for life cycle assessment (LCA) or environmentally extended input‐output (EEIO) analysis; some modeling is necessary to recast coproductions by multifunctional activities as monofunctional unit processes (a.k.a. Leontief production functions or technical “recipes”). This modeling is done with allocations in LCA and constructs in input‐output. In this article, we ask how these models respect or perturb the balances of the original inventory. Which allocations or constructs, applied to what type of data set, have the potential to simultaneously respect its multiple physical, financial, and market balances? Our analysis builds upon the recent harmonization of allocations and constructs and the ongoing development of multilayered supply and use inventory tables. We derive the necessary and sufficient conditions for balanced models, investigate the role of data aggregation, and clarify these models' relation to system expansion. We find that none of the modeling families in LCA and EEIO are balanced in general, but special data characteristics can allow for the respect of multiple balances. An analysis of these special cases allows for clear guidance for data compilation and methods integration.     

Disaggregating the Power Generation Sector for Input‐Output Life Cycle Assessment

The electric power industry plays a critical role in the economy and the environment, and it is important to examine the economic, environmental, and policy implications of current and future power generation scenarios. However, the tools that exist to perform the life cycle assessments are either too complex or too aggregated to be useful for these types of activities. In this work, we build upon the framework of existing input‐output (I‐O) models by adding data about the electric power industry and disaggregating this single sector into additional sectors, each representing a specific portion of electric power industry operations. For each of these disaggregated sectors, we create a process‐specific supply chain and a set of emission factors that allow calculation of the environmental effects of that sector's output. This new model allows a much better fit for scenarios requiring more specificity than is possible with the current I‐O model.     

Reducing Gaseous Emissions and Resource Consumption Embodied in French Final Demand: How Much Can Waste Policies Contribute?

This study investigates the benefits of waste management policies on gaseous emissions and resource consumption caused by the final demand, in the specific case of France and in a context of economic growth. Waste input‐output analysis is implemented to compare three scenarios, depicting and combining the upward trend of final demand from 2008 to 2020, the increase in recycling rates by 2020 (encompassing the achievement of recycling objectives set by European Union Directives), and the simultaneous larger implementation of best available techniques (BAT) for waste incineration. Hybrid monetary physical input‐output tables are initially derived from balanced physical supply and use tables and further complemented with process inventory data on waste treatment technologies. A dramatic reduction in the demand for primary metals (by a factor of 2.0) and for primary mining and quarrying products for construction (by a factor of 1.9) is observed in 2020, as compared to 2008, in the case of the scenario “recycling,” despite the competition induced by the evolution of the final demand. On the contrary, considering energy requirements and fossil carbon dioxide, sulfur dioxide, and nitrogen oxide emissions caused by the French final demand, the combined improvements in recycling and incineration performances by 2020 would only limit the rise induced by the evolution of the final demand. On the basis of these results, the potential contribution of waste management policies to the decoupling of resource consumption and gaseous emissions from final demand's growth is finally discussed.     

Inter-regional linkage analysis of industrial CO2 emissions in China: An application of a hypothetical extraction method

As the largest CO₂ emitter in the world, China has faced great pressure to mitigate its CO₂ emissions. Thus, issues related to CO₂ emissions in China have been widely studied. However, the industrial linkages of CO₂ emissions at the regional level have been less concerned. This study integrates hypothetical extraction method with the multi-regional input–output model, and investigates industrial CO₂ emission linkages of China at the regional level. Based on the data of China in 2007, which decomposes China into eight regions, this study first analyzes the production-based emission (PBE) and consumption-based emission (CBE) of each region. The PBE and CBE of 10 branches are then analyzed and decomposed into three parts. Finally, this study decomposes the externally produced embodied emission (EPEE) and internally produced embodied emission (IPEE) of Petrochemicals and Minerals in the East Coast, to illustrate how these two indicators of a branch affect other branches in the economy. Results show that regions with large PBE, such as coastal regions and Central, usually have large CBE, whereas Jing-jin has the smallest PBE and CBE. Branches such as Mining and Petrochemicals and Minerals, have large PBE and are net CO₂ emission exporters; while Construction and Other Services are net importers. According to the decomposition results of PBE and CBE, branches can be classified into four groups. The decomposed IPEE and EPEE of Petrochemicals and Minerals in the East Coast show that from the perspective of regions, CO₂ emissions this branch exports to and imports from East Coast are most. From the perspective of branches, decomposition of IPEE shows that Petrochemicals and Minerals in the East Coast exports a large amount of CO₂ emissions to Construction, while the decomposition results of EPEE show that the studied branch imports least CO₂ emissions from Construction. Policy implications deduced from this study are discussed.     

Crop plants versus energy plants—On the international food crisis

The recent price explosion of important agricultural commodities has lead to an international food crisis. The price rise is attributed to fundamental factors, such as the rising demand for dairy and meat products in China and the development of the bioenergy branch as well as on short-term factors such as the behaviour of speculators. Mobilising the worldwide supply can held to overcome the demand driven shortage of food this can be achieved through a proper design of the agricultural policy both in developed and developing countries.