1. Introduction to Input-Output Based LCA

2. Admin Issues Friday Feb 16th? 1-2:30 confirmed HERE

3. Structure of a Process-based LCA Model process sub-system1 process sub-system2

4. How Research is Done… l Sitting around in an office, we were complaining about problems of LCA methodology. l Realized economic input-output models could solve boundary and circularity problems. l Then hard work – assembling IO models, linking to environmental impacts and testing. l Found out later that Leontief and Japanese researchers had done similar work, although not directly for environmental life cycle assessment.

5. Economic Input-Output Analysis l Developed by Wassily Leontief (Nobel Prize in 1973) l “General interdependency” model: quantifies the interrelationships among sectors of an economic system l Identifies the direct and indirect economic inputs of purchases l Can be extended to environmental and energy analysis

6. The Boundary Issue l Where to set the boundary of the LCA? l “Conventional” LCA: include all processes, but at least the most important processes if there are time and financial constraints l In EIO-LCA, the boundary is by definition the entire economy, recognizing interrelationships among industrial sectors l In EIO LCA, the products described by a sector are representing an average product not a specific one

7. Circularity Effects l Circularity effects in the economy must be accounted for: cars are made from steel, steel is made with iron ore, coal, steel machinery, etc. Iron ore and coal are mined using steel machinery, energy, etc... emissions product system boundary RESOURCESRESOURCES waste

8. Building an IO Model l Divide production economy into sectors (Note: could extend to households or virtual sectors) l Survey industries: Which sectors do you purchase goods/services from and how much? Which sectors do you sell to? (Note: Census of Manufacturers, Census of Transportation, etc. every 5 years)

9. Building an IO Model (II) l Form Input-Output Transactions Table – Flow of purchases between sectors. l Constructed from ‘Make’ and ‘Use’ Table Data – purchases and sales of particular sectors. (Note: need to reconcile differing reports of purchases and sales...)

10. Economic Input-Output Model X ij + Y i = X i ; X i = X j ;using A ij = X ij / X j (A ij *X j ) + Y i = X i in vector/matrix notation: A*X + Y = X => Y = [I - A]*X or X = [I - A] -1 *Y

11. Building an IO Model (III) l Sum of Value Added (non-interindustry purchases) and Final Demand is GDP. l Transactions include intermediate product purchases and row sum to Total Demand. l From the IO Transactions Model, form the Technical Requirements matrix by dividing each column by total sector input – matrix A. Entries represent direct inter-industry purchases per dollar of output.

12. Scale Requirements to Actual Product $20,000 Car: Engine $2500$2000$1200$800$10... Conferences Other Parts Steel Plastics $2500 Engine: $300$200$150$10... Electricity SteelAluminum

13. Example: Requirements for Car and Engine Car: Engine 0.1250.10.060.04... Conferences Other Parts Steel Plastics Engine: 0.120.080.060.004... Electricity SteelAluminum 0.0005

14. Using a Requirements Model l Columns are a ‘production function’ or recipe for making $ 1 of good or service l Strictly linear production relationship – purchases scale proportionally for desired output. l Similar to Mass Balance Process Model – inputs and outputs.

15. Mass Balance and IO Model Car Production (Motor Vehicle Assembly) Engine Steel Etc. Racing Etc. Final Demand

16. Supply Chains from Requirements Model l Could simulate purchase from sector of interest and get direct purchases required. l Take direct purchases and find their required purchases – 2 level indirect purchases. l Continue to trace out full supply chain.

17. Leontief Results l Given a desired vector of final demand (e.g. purchase of a good/service), the Leontief model gives the vector of sector outputs needed to produce the final demand throughout the economy. l For environmental impacts, can multiply the sector output by the average impact per unit of output.

18. Supply Chain Buildup l First Level: (I + A)Y l Second Level: A(AY) l Multiple Level: X = (I + A + AA + AAA + … )Y l Y: vector of final demand (e.g. $ 20,000 for auto sector, remainder 0) l I: Identity Matrix (to add Y demand to final demand vector) l A: Requirements matrix, X: final demand vector

19. Direct Analysis – Linear Simultaneous Equations l Production for each sector: l X i = a i1 X 1 + a i2 X 2 + …. + a in X n + Y i l Set of n linear equations in unknown X. l Matrix Expression for Solution: X(I - A) = Y X = (I - A) -1 Y l Same as buildup for supply chain!

20. Life Cycle Stages At each stage, there are some inputs used and some outputs created that need to be identified Example: automobile production –Direct: smoke from factory –Indirect: smoke from suppliers’ factories

21. Effects Specified l Direct »Inputs needed for final production of product (energy, water, etc.) l Indirect »ALL inputs needed in supply chain »e.g. Metal, belts, wiring for engine »e.g. Copper, plastic to produce wires »Calculation yields every $ input needed

22. Recall: Supply Chain Exercise See posted spreadsheet

23. EIO-LCA Implementation l Use the 491 x 491 input-output matrix of the U.S. economy from 1997 l Augment with sector-level environmental impact coefficient matrices (R) [effect/$ output from sector] l Environmental impact calculation: E = RX = R[I - A] -1 Y

24. Data Sources in EIO-LCA (1997)

25. EIO-LCA Software Internet version http://www.eiolca.net/http://www.eiolca.net/ About 1 million users to date About 1,500 registered users –update notices –other benefits First LCA tool completely free on Internet in full version (not a ‘demo’)