A4: Macroeconomic Sustainability assessment Page 1 Challenges:  Generate adequate data for macroeconomic data analysis  Develop and apply tools to analyse data meaningfully Questions:  What are sustainability challenges in the world economy?  What are drivers of carbonization?  Is a generalized leapfrogging, i.e. foregoing carbon- and enegy intensive steps in human development possible?  What are underlying reasons of carbonization and increasing energy demand?

A4: Disaggregation of existing multi-regional input-output data (MRIO) Page 2 Question:  How to increase existing MRIO data sets’ sectoral and geographic resolution? Idea:  Use existing alternative data to disaggregate existing datasets  Development of an algorithm to increase limited regional or sectoral resolution, while considering consistency of extended MRIO  Exemplarily performed for the United States, which are disaggregated to federal states by using GDP data  Development of an adjustment rule to ensure that sub-flows match superordinate flow in sum Wenz, L., S. N. Willner, A. Radebach, R. Bierkandt, J.C. Steckel and A. Levermann (2014): Regional and Sectoral Disaggregation of Multi-Regional Input-Output Table – A flexible algorithm, Economic Systems ResearchRegional and Sectoral Disaggregation of Multi-Regional Input-Output Table – A flexible algorithm Visualization of state decomposition of the US economy by GDP

Page 3 Question:  How to evaluate process innovations as developed in the CRC regarding their global impacts? Idea:  Development of MRIO-framework to evaluate overall environmental impact of innovative processes  Proceeding: identify “old” processes in supply chains, replace them by innovative technology and upscale those supply chains to MRIO data, then evaluate total impact  Exemplarily performed for turning and welding processes  Furthermore: Comparison with Life-Cycle Assessment Results  Improved industrial processes can indeed contribute to global climate change mitigation when applied large scale A4: Comparison of alternative production technologies within MRIOs Schult, H., M. Burger, Y. Chang, P. Fürstmann, S. Neugebauer, A. Radebach, G. Sproesser, A. Pittner, M. Rethmeier, E. Uhlmann and J. C. Steckel (2015): Assessing CO2-reduction potentials of improved manufacturing processes using MRIOs, Working paper available on request Innovative process applied GERMANY EUROPEWORLD Global impact in Mio. USD in %- 0.15· · ·10 -3 in kt in % · · ·10 -3 Results for the internally cooled wet machine turning process for implementation in Germany, Europe and World. A carbon emission reduction is observed in all cases. LCA comparison of turning process alternatives

A4: Understanding drivers global energy intensity and carbon intensity Page 4 Question:  What drives changes in global energy intensities? Idea:  Decomposition analyses performed to understand drivers of energy use at different levels  Analysis performed with Global Trade Analysis Project data (GTAP) between 2001 and 2007  Specific focus on delocalization component and technological component Results:  Technological improvements are mainly driven by improvements in overall energy- intensity in particular in mining and heavy manufacturing sectors  Those trends are countervailed by energy intensive sectors gaining shares in relative energy intensive regions Forin, S., J.C. Steckel, A. Radebach and H. Schult : Intra-sectoral Efficiency Gains vs Delocalization: A Decomposition Analysis of Global Energy Intensity between 2001 and 2007, IAEE Conference 2014 Factor decomposition of changes in global CO2-emissions changes

A4: What drives the renaissance of coal? Page 5 Question:  What are underlying factors of global carbonization factors? Idea:  Apply extended Kaya-like decomposition analyses and contrast resulting effects with statistical analyses Results:  In recent years coal has become the predominant source of global carbon emissions  Expansion of coal usage is not restricted to few individual countries  Coal witnesses a global renaissance majorly driven by poor fast growing countries  Further building of coal power plants might lead to lock-in effects for energy infrastructure Steckel, J.C., O. Edenhofer and M. Jakob (forthcoming): What drives the renaissance of coal? PNAS Factor decomposition to identify drivers of increasing global carbon intensity

Page 6 Ward, H., A. Radebach, I. Vierhaus, A. Fügenschuh and J.C. Steckel (2015): How existing technologies can contribute to reducing global CO2-emissions. Working paper available on request A4: Reduction potentials by global access to existing technologies Decomposition analysis of drivers of relative sectoral CO2-emission reduction for the reference optimization scenario Question:  How large are CO2-emission saving potentials if more efficient, existing sectoral production technology are accessible to all countries? Idea:  Develop an innovative framework combining linear optimization with MRIO data that allows for exchange of sectoral technologies, while ensuring consistency of international supply chains Results:  Relevant CO2-emission saving potentials already exist when making medium efficient technologies available  Largest reduction potentials are located in a small, specific set of sectors

Page 7 Radebach, A., H. Ward and J.C. Steckel (2015): On the importance of manufacturing sectors for economic development and growth. Working paper available on request A4: Assessing the role of manufacturing sectors for economic development Value added-based similarity network of economic sectors Question:  How does sectoral composition determine economical development opportunities of an economy? Idea:  Apply correlation- and network analysis to MRIO data to identify and map viable economic development pathways in the “similarity space” of sectors. Results:  We find clearly distinguishable groups of sectors, where light manufacturing sectors serve as bridges  Buildup of specific manufacturing sectors is crucial for continuous economic development  Undergoing an economy’s industrialized state seems to be inevitable for continuous economic growth