Transcript Canada-US EIO-LCA Analysis

Canada-U.S.
Binational EIO-LCA Model
Jonathan Norman
Heather L. MacLean
Department of Civil Engineering
University of Toronto
LCA of Oil Sands Technology – Kick-Off Meeting
November 3, 2006
University of Calgary
Outline

Environmental Input-Output Analysis


Overview, limitations, applications
Canadian and U.S. EIO-LCA models

Rationale for Binational EIO models

Canada-U.S. EIO-LCA model

Applications

Life-Cycle Assessment for Canadian oil sands
Motivation

Quantify energy use & emissions
associated with oil sands economic
activity
Economic Activity
↕
International Trade
↕
Energy Use/Emissions
Canada
United States
Input-Output Tables

Systems of National Accounts
Accounts for all transactions in an economy…
Inputs
Outputs
Interindustry Demand
Final Demand
Z
Y
Total Output, X
Input-Output Analysis

Uses IO tables to quantify interrelationships
between industrial sectors (Leontief, 1941)
E = E ∆X = E (I-A)-1∆Y
∆X = Change in Economic Output by sector
∆Y = Change in Consumer Demand
(I-A)-1 = Leontief Inverse
E = Total emissions across all sectors

Accounts for direct and indirect effects of production
EIO-LCA Analysis
Final
Demand
Direct
Impacts
Indirect
Impacts ...
Motor vehicle parts
Primary iron and steel
Motor vehicle parts
Other transport equipment
Motor vehicles
Business services
Other transport equipment
Business services
Primary iron and steel
ENERGY
ENERGY
Pollutants
(CO2, CH4, etc.)
Pollutants
(CO2, CH4, etc.)
Pollutants
(CO2, CH4, etc.)
Source: Bjorn et al. (2004)
U.S. & Canadian EIO-LCA models

U.S. model created by Green Design Initiative –
Carnegie Mellon University (1995) (www.eiolca.net)
 1997 US Input-Output Table (491 sectors)
 Coupled to wide array of environmental data


Energy, Fuel use, Greenhouse Gases, much more.
Canadian model originally created by U of T (2003)
 1997 Candian Input-Output Table (117 sectors)
 Coupled to energy, fuel use and GHG data
(compiled by Statistics Canada)
Comparing US and Canada
Significant international differences in fuel use:
Agriculture
1
0
0
%
9
0
%
8
0
%
7
0
%
6
0
%
5
0
%
4
0
%
3
0
%
2
0
%
1
0
%
0
%
Canada
U.S.
Mining, Oil & Gas
Canada
U.S.
Propane
Petroleum Products
Coal
Electricity
Manufacturing
Canada
Natural Gas
U.S.
Comparing US and Canada
10
Greenhouse Gas Emissions
9
MT CO2 eq. per $US Million
8
Electricity &
Natural Gas
7
Canada
United States
6
5
4
3
2
1
0
Agriculture
Mining &
Utilities
Light
Manufacturing
Primary
Manufacturing
Secondary
Manufacturing
Canada – U.S. Trade

Canada’s economy is highly dependent on that of the
U.S.



¼ to ⅓ of GDP in Canada associated with US Trade
NAFTA Trade Block – over past 10 years trade has
increased signifcantly.
To improve accuracy EIO-LCA of major international
projects like the oil sands must consider emissions and
energy use in the U.S.
Canada-U.S. EIO-LCA
Binational model links Canadian & U.S.
EIO-LCA models via trade flows
Captures Biregional Feedbacks:
Demand Canada 
Production Canada &
Demand U.S. Imports 
Production U.S. 
Demand Can Imports 
Production Canada
….etc.
Result is total energy use and emissions
across Canada & the U.S. for a
particular economic activity.
Big Benefits for Canadian LCA
120%
Difference between bi-national EIO and Canadian EIO alone
Percent Difference in Energy/Greenhouse Gas Intensity
100%
80%
60%
40%
20%
0%
-20%
Energy
-40%
Greenhouse Gases
-60%
Agriculture
Mining &
Utilities
Light
Manufacturing
Primary
Manufacturing
Secondary
Manufacturing
Canada-U.S. EIO-LCA Analysis

Limitations





Simplified linear, static view
Product mix issues
Cradle-to-gate
Data limitations
Advantages




Intersectoral detail
System boundary is entire economy (Canada & U.S)
Quick, transparent – often needed for ‘real-world’ policy
Excellent first-round estimation for a snapshot in time
Application to Oil Sands LCA

Advantages of Binational EIO-LCA allow it to be
used effectively for comparison of different oil sands
technology scenarios, considering:



Total emissions across the supply chain
Economy-wide Canada and U.S. emissions
Binational EIO-LCA can be improved by using hybrid
techniques that incorporate process-based LCA for
crucial aspects of oil sands processes.
Thank You!
Questions & Comments
More Information:
Jon Norman
Department of Civil Engineering
University of Toronto
Tel: 416-327-8545
Fax: 416-978-3674
E-mail: [email protected]
North American EIO Model

Based on a Chenery-Moses Multiregional Input-Output
Framework (Chenery & Clark, 1959; Moses, 1955)

Modified to account for Competitive Imports

Separates out trade in the Canada/U.S. IO Tables



Final demand = domestic demand + exports
Economic output = domestic output + imports
Import co-efficient:
Mi 
mi
n
z
j 1
ij
 yd i
Imports of commodity i
=
Total domestic demand for commodity i
Linking Methodology
Bi-national Canada-U.S. I/O Model
 X C   I  ( I  Mˆ C ) AC  Mˆ C ,U AU  1 ( I  Mˆ C )Y C  Mˆ C ,U Y U  exC ,R 

 U = 
U
U
U ,C C
U ,R 
U ,C C
U
U
ˆ
ˆ
ˆ
I  ( I  M ) A  ( I  M )Y  M Y  ex 
X    M A
Total
Output
International
(I-A)-1
Final
Demand
Limitations & Advantages
Limitations

Same limitations as National EIO models, but also:


Import proportionality assumption
Data Limitations in terms of harmonization
Key Advantages


Accounts for trade effects ignored in national EIO
Allows for North American-wide policy application:


More accurate Life-Cycle Assessment
Modeling cross-border impacts of production/consumption
US Energy Pull on Canada
25
TJ/$US Million of U.S. Final Demand
Energy Use Resulting from $1M U.S. Final Demand
20
Canadian Energy Use
US Energy Use
15
10
5
0
Petroleum and Pulp, Paper and Primary Metal
Coal Products Paperboard Mills Manufacturing
Manufacturing
Converted
Paper Product
Manufacturing
Oil and Gas
Extraction
Wood Product
Manufacturing
Printing and
Related Support
Activities
Motor Vehicle
Body, Trailer &
Parts
Manufacturing
Other
Fishing, Hunting
Transportation
and Trapping
Equipment
Manufacturing
Canadian Energy Pull on US
35
TJ/$US Million of Cdn. Final Demand
Energy Use Resulting from $1M Canadian Final Demand
30
25
US Energy Use
Canadian Energy Use
20
15
10
5
0
Pesticides,
Fertilizer and
Other
Agricultural
Chemical
Manufacturing
Basic Chemical Resin, Synthetic
Textile and
Plastic and
Motor Vehicle
Manufacturing
Rubber, and
Textile Product Rubber Product Body, Trailer &
Artificial and
Mills
Manufacturing
Parts
Synthetic Fibres
Manufacturing
and Filaments
Manufacturing
Electrical
Equipment and
Component
Manufacturing
Household
Appliance
Manufacturing
Machinery
Manufacturing
Motor Vehicle
Manufacturing
Methodological Approach

Environmental Input-Output (EIO) Analysis

Popular modeling technique based on National
Accounting methods used to determine GDP

Applied effectively to estimate environmental/energy
impacts associated with economic production since
early 1970’s

Our approach: Build new EIO models for Canada
and US and link them through trade flows