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Combining Multiregional Input-Output Analysis with a World Trade Model for Evaluating Scenarios for Sustainable Use of Global Resources, Part I: Conceptual Framework

Combining Multiregional Input-Output Analysis with a World Trade Model for Evaluating Scenarios for Sustainable Use of Global Resources, Part I: Conceptual Framework

Journal of Industrial Ecology 20(4): 775-782

Consumption in a particular country often entails resource extraction, production, and environmental degradation in remote locations. This fact has stimulated a growing body of empirical analysis using input-output (I-O) databases and techniques to reveal and quantify the underlying linkages. Two lines of research rooted in I-O economics, multiregional input-output (MRIO) analysis and I-O modeling of the world economy, describe and analyze these relationships, the first for the past, increasingly in the form of footprints and the underlying pathways, and the latter under alternative scenarios about possible courses of action in the future. The article shows how organizing such scenario outcomes into an MRIO database can extend the reach of MRIO analysis to the future while simultaneously supplementing the capabilities of the world trade modeling framework. We describe the compilation of an MRIO database from the results of scenario analysis using the world trade model (WTM) in a companion article (Part II, Implementation); the subsequent application of MRIO techniques to this database permits the evaluation of prospects for the future. We also address several overlooked challenges, namely, the need to include factor endowments and distances between potential trade partners in an MRIO database, the representation of sectors providing transport of internationally traded goods, and the manipulation of mixed physical and money units when both quantities and prices are endogenous.

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Accession: 066320306

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DOI: 10.1111/jiec.12303

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