In the era of globalisation, supply chains are increasingly organised on the international level, thus disconnecting the location of production from final consumption. Various local environmental and social impacts in – often developing – countries, which extract and process raw materials or manufacture products, are therefore driven by final consumption in rich countries, e.g. in Europe or North America. Consumption-based – or “footprint” – indicators consider the resources embodied in internationally traded products and are thus independent from the location of production.

Footprint-type indicators have been developed for a number of resources and different economic levels such as products, sectors or countries. On the country level, three different approaches can be distinguished to calculate footprints: bottom-up, top-down and mixed approaches.

Bottom-up approaches

Bottom-up approaches comprise detailed data on bilateral trade and domestic production expressed in quantities (e.g. tonnes). Based on this data, the ‘apparent consumption’ of a country is derived by calculating domestic production plus imports minus exports. The quantities of each product consumed in a country are multiplied with coefficients reflecting the resource use along the whole supply chain of a product.

These coefficients are primarily obtained from Life Cycle Analyses (LCAs). Although LCA studies are technically detailed, they are often limited in their spatial specification. As a consequence, if applied on the global level, the sum of all footprints from bottom-up calculations will inevitably differ from the sum of all resource inputs. One major advantage of bottom-up approaches is that they are able to consider country-specific characterisation factors. However, if applied for global analyses, due to the lack of data often regional or product averages are applied.

With regard to data availability for material coefficients, the Wuppertal Institute in Germany maintains a database for more than 200 products, with most coefficients being provided for one specific (mainly European) country or the world average (Wuppertal Institute 2014). The European Statistical Office also provides information about RME coefficients for imports and exports by 182 product groups and 51 raw material categories, adapted to the European case (Eurostat 2016).

Top-down approaches

In contrast to bottom-up methods, top-down approaches build on input-output analysis (IOA). IOA focuses on the economic structure of a country in the form of matrices that depict the monetary flows between the sectors of an economy, i.e. input-output tables. Each vector of an IO table can be interpreted as an inventory of production inputs. The environmental data on resource use linked as an extension to an IO table can be considered an inventory of environmental inputs such as raw materials per economic sector.

In general two main types are distinguished – single-region and multi-regional input-output (MRIO) models. Single-region IO models assume that imported products are produced with the same technology as domestic products. In MRIO models, country IO tables are linked together via bilateral trade data and can therefore consider different technologies applied in different countries of production. MRIO analysis allows product value chains and related material use to be tracked along the various life cycle stages of all products and services from material extraction to final demand.

IOA, in particular in its multi-regional form, has a number of key advantages. The main advantage is that it allows the calculation of material footprints for all products and industries, including those with very complex global supply chains. By following a top-down approach, input-output analysis also avoids double counting. A specific material input can only be allocated once to final demand, as the supply and use chains are completely represented. As a result, the global system is always consistent, i.e. the sum of all material footprints equals the sum of global material extraction.

A major disadvantage of IOA is the limited commodity and regional detail determined by the sector and region definitions of an IO model. Further, inaccurate results are produced by the assumption of homogenous environmental characteristics of all products within a product group; for example, when products with widely diverging mass-value-ratios are aggregated into one product group.

Today, various global MRIO databases exist that can be extended with data on global material extraction, in order to track the flow of embodied materials along international supply chains to final demand. A comparison can be found here. For studies on material footprints based on MRIO data, including detailed technical descriptions, see (Giljum et al. 2015; Giljum et al. 2017; Giljum et al. 2016; Wiedmann et al. 2015; Eisenmenger et al. 2016; Arto et al. 2012).

Mixed (hybrid) approaches

Hybrid approaches aim to exploit the advantages from IOA in combination with detailed physical trade accounts and process-based coefficients. Depending on the processing stage, as well as data quality and availability, footprints for different products are calculated with the best-suited approach. Typically, material coefficients are used for raw materials and products with a low level of processing. Processed commodities and finished goods with more complex production chains are measured using IOA, which allows consideration of all indirect effects and thus all upstream material requirements.

Hybrid models are increasingly applied in all areas of resource flow accounting, acknowledging their respective strengths and capabilities. The combination of top-down and bottom-up methods is achieved in various ways. For example, detailed statistics in mass units can be incoroporated into monetary input-output tables, creating mixed-unit IO tables, i.e. tables that use both monetary and mass units.

Hybrid calculation models have been set up for a range of European countries, for instance for Austria or the Czech Republic. Also the European Statistical Office has developed a hybrid calculation method to assess the material footprint of the EU-28.

Harmonising methodologies

Based on current international policy developments, for example in the context of the United Nations Sustainable Development Goals (SDGs), it is expected that demand for material footprint accounting and other demand-based accounts will continously increase. This is the case, as the SDGs require countries to improve the resource productivity of both production and consumption, calling for both the DMC and RMC indicators to be applied.

However, no global reference method for calculating material footprints exists yet. Because of the global characteristics of supply chains and the differences in industry structure among countries, no national statistical office can run their own demand-based accounts reliably. Reporting requirements for the SDGs will therefore likely necessitate developing a global MRIO calculation system under the leadership of a trusted international organization. National statistical offices would then be allowed to use this capacity and data infrastructure.

The OECD (Organisation for Economic Co-operation and Development) is currently stearing an international process of coordinating relevant policy actors as well as statistical institutions and researchers, in order to identify the necessary technical and administrative steps towards such a harmonisation.

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