Input-Output Analysis of Environmental Impact in Trade Systems

Input-output analysis of environmental impact in trade systems offers a comprehensive framework for attributing resource use, emissions and pollutants along complex supply chains. By augmenting economic input-output tables with environmental extensions, researchers can trace the flows of embodied emissions to final consumers, regardless of where production occurs. Multiregional input-output (MRIO) models capture interregional and international trade linkages, revealing hotspots of carbon and pollutant footprints and enabling disaggregation by sector and geography. Structural decomposition analysis further dissects the drivers of change in embodied emissions, isolating effects of efficiency gains, shifts in industrial structure and evolving consumption patterns. This approach has underpinned advances in high-resolution mapping of consumption-driven emissions, quantification of trade-driven pollution relocation and the development of mitigation strategies that align producer–consumer responsibilities. Its global significance lies in informing equitable climate and environmental policy, guiding sustainable production and consumption, and targeting collaborative interventions across supply chains.

Research from Nature Portfolio

Recent studies have harnessed high-resolution MRIO frameworks to map global carbon footprints and socio-economic impacts of trade. One investigation generated a 10 km × 10 km spatially explicit assessment of carbon emissions embodied in global consumption within China, identifying manufacturing hubs where a small fraction of land area accounts for the majority of footprints and highlighting opportunities for targeted mitigation through producer–consumer collaboration. Another study has elucidated the environmental, water and socio-economic footprints of Asia-Pacific trade from 1995 to 2015, revealing growing intra-regional interdependence in resource use, greenhouse gases, particulate emissions and labour embodied in trade. While improvements in emission intensities have occurred, substantial disparities persist between economies, underscoring the need for joint sustainable transformation and policy coordination across rapidly evolving supply chains.

Input-Output Analysis of Environmental Impact in Trade Systems publication trend

The graph below shows the total number of articles in input-output analysis of environmental impact in trade systems across all publications each year (not limited to Nature Index journals).

Technical terms

Environmentally extended input-output analysis: Integration of environmental data with economic input-output tables to allocate resource use and emissions to final demand.

Multiregional input-output (MRIO) model: Framework accounting for intersectoral and interregional trade flows to trace environmental impacts across geographical boundaries.

Consumption-based emissions: Total pollutants or greenhouse gases attributed to the consumption of goods and services, irrespective of production location.

Structural decomposition analysis: Method to decompose changes in embodied emissions into contributions from factors such as technology, structure and final demand.

Embodied emissions: Emissions generated throughout the supply chain that are ‘embedded’ in the production of goods and services.

References

1. Regional determinants of Chinas consumption-based emissions in the economic transition. Environmental Research Letters (2020).
2. Mapping global carbon footprint in China. Nature Communications (2020).
3. Chinese provincial multi-regional input-output database for 2012, 2015, and 2017. Scientific Data (2021).
4. Mapping Carbon and Water Networks in the North China Urban Agglomeration. One Earth (2019).
5. Environmental-social-economic footprints of consumption and trade in the Asia-Pacific region. Nature Communications (2020).