Transcript Energy Management

Energy Management :: 2011/2012
Economic Input-Output Life-Cycle Assessment
Prof. Paulo Ferrão
[email protected]
Energy Management
Industrial Ecology: Tools
Micro-scale
Macro-scale
Environment
MFA
LCA
Ecodesign
LCAA
Hybrid EIO-LCA
EIO-LCA
EIO
Economy
Economic Input-Output Life-Cycle Assessment
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IO Principles
•
Idea developed by W. Leontief (Nobel prize in economics in the 70’s)
–
Extend the ideas of the economic base model by disaggregating production into a set of sectors
Imports
Industrial Sectors
Market
$
Industry
$
$
Exports
Services
Economic Input-Output Life-Cycle Assessment
Households
Consumption
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Ecomic Input-Output tables, History
As part of the establishment of national accounts, input-output analysis was devised in the
1930s, and first implemented in the 1940s for the USA.
Its founder was Wassilyu Leontief (1936), and his approach to national accounts was a
disaggregated one, focusing on how industries trade with each other, and how such interindustry trading influenced the overall demand for labor and capital within an economy.
Economic Input-Output Life-Cycle Assessment
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Basics
The basic distinction that is made in input-output analysis is between the demand for
goods and services sold to ‘Final Demand’ (households, governments, exports,
investment), and the ‘Total Demand’ in the various sectors, resulting from the direct
impact of final demand, and the indirect impacts resulting from inter-industry trading
(intermediate demand).
For instance, almost no iron and steel products are sold directly to domestic consumers
(final demand), but a great deal is sold embodied in manufactured goods, such as cars
and washing machines
Total demand = intermediate demand + final demand
Economic Input-Output Life-Cycle Assessment
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Input-Output Analysis
Sectors
(square matrix)
+
Primary Inputs
=
Total Inputs or
Total Costs
Economic Input-Output Life-Cycle Assessment
Primary Inputs:
=
Total output
Intermediate
Inputs
+
Consumption
Inputs
Sectors
Outputs
•
•
Added value (salaries, profits, …);
Imports;
Consumption:
•
•
Demand (families, government);
Exports
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IO model - Leontief
•
•
•
W. Leontief (Nobel prize in economics in 70’s)
Part of National Income and Product Accounts
Total Inputs = Total Outputs
Total Output
Transaction table
beetween sectors
Final demand
Sales
$
x11 + x12 + x13 + … + x1n + y1 = x1
x21 + x22 + x23 + … + x2n + y2 = x2
x31 + x32 + x33 + … + x3n + y3 = x3
…………………………………….
xn1 + xn2 + xn3 + … + xnn + y3 = xn
Economic Input-Output Life-Cycle Assessment
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Quadro de transacções
Economic Input-Output Life-Cycle Assessment
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Tecnichal Coeficients Matrix
Intermediate
Input (€)
/
Total Input
(€)
Primary Input
(€)
Economic Input-Output Life-Cycle Assessment
=
Technical
Coefficient
Matrix
(-)
Intermediate
Technical
Coefficient
Matrix (-)
Primary Technical
Coefficient (-)
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IO model - Leontief
• If we define an input coefficient aij , that quantifies the
output of sector i absorbed by sector j per unit of its total
output of sector j
xij
aij 
xj
where,
– aij, is the input coefficient of product of sector i into sector
j
– xij, is the amount of the product sector i absorbed, as its
input, by sector j
– xj, is the physical output of sector j
then
xi   aij x j  yi
or, in a matrix form
Economic Input-Output Life-Cycle Assessment
X  ΑX  Y
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IO model - Leontief
• That is equal to
Y  (I  Α)X
• Since the final demand is normally exogenous or given, for
economic purposes the problem is to calculate the output
column vector X. To do that is necessary to pré-multiply the
by the inverse of (I-A), commonly referred as the Leonfief
inverse, that result in
X  (I  Α) 1 Y
Where
– A denotes the net direct inputs of the coefficient matrix,
– A2+A3+…+A∞ are, respectively, the 1st, 2nd, and n tier
indirect requirements of the coefficient matrix.


(I  Α) 1 Y  I  A  A 2  A 3  ...  A  Y
Economic Input-Output Life-Cycle Assessment
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Quadro de transacções
Economic Input-Output Life-Cycle Assessment
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Quadro de coeficientes de Leontief
Economic Input-Output Life-Cycle Assessment
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Classical uses
One of the main uses of input-output analysis is to display all flows of goods and services
within an economy, simultaneously illustrating the connection between producers and
consumers and the interdependence of industries.
An advantage of input-output tables is that economic components, such as income, output
and expenditure, are presented in a consistent framework reconciling the discrepancies
between the estimates of these components.
Economic Input-Output Life-Cycle Assessment
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Uses
Using linear algebra, input-output analysis allows all economic activity to be directly related
to final demand. Of course, the final demand for the various producing sectors sums to
Gross Domestic Product (GDP), one of the fundamental measures in national
accounting.
Input-output tables can be, and are being, used for various economic analyses within and
outside Government. The use of input-output tables is particularly important for analyzing
structural adjustment in industry.
Economic Input-Output Life-Cycle Assessment
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Mathematical formulation of the Input – Output Model
Aij
Yi
Matrix of the intermediate Input
Vector of final consumption
Intermediate Input
Final demand
Sector 1
Sector 2
Sector 3
Sector 1
S11
S12
Sector 2
S21
Sector 3
+
Exports
Consumption
=
Total output
S13
E1
C1
TO1
S22
S23
E2
C2
TO2
S31
S32
S33
E3
C3
TO3
VA1
VA1
VA1
I1
I2
I3
TI1
TI2
TI3
+
Added value
Imports
=
Total input
Economic Input-Output Life-Cycle Assessment
Aij + Yi = Xi
Xi
Vector of total output
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Input-Output Analysis
Macro-Economy Application (example)
Given the following matrix of the intermediate input for an economy with only 3 sectors
(Agriculture, Industry and Services), and the respective values for the exports, imports,
consumption and added value.
Agriculture
Industry
Services
+
VA
Imports
Agriculture
5
20
10
20
20
75
Intermediate input
Industry
Services
20
0
20
10
30
20
40
10
120
+
Exports
20
30
10
Demand
30
40
30
=
X
75
120
100
30
40
100
a) Determine the elasticity in the economy for the unitary demand increase in the
Agriculture sector.
Economic Input-Output Life-Cycle Assessment
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Input-Output Analysis
Macro-Economy Application (example solution)
A
Agriculture
Industry
Services
Agriculture
0,07
0,27
0,13
Industry
0,17
0,17
0,25
Services
0,00
0,10
0,20
I-A
Agriculture
Industry
Services
Agriculture
0,93
-0,27
-0,13
Industry
-0,17
0,83
-0,25
Services
0,00
-0,10
0,80
(I-A)-1
Agriculture
Industry
Services
Agriculture
1,14
0,40
0,32
Industry
0,24
1,33
0,46
Services
0,03
0,17
1,31
a) The elasticity in the economy will be given by X,
X = {1.14; 0.40; 0.32 }, 1.86 .
Economic Input-Output Life-Cycle Assessment
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IO Principles
•
Basic assumptions
Main
Assumption
The sector produces goods according a fixed
production function (recipe)
Simplification
But also a limitation
Limits the application scope to few years, where is
shown that the “recipe” don’t change much
Linear production functions
Leontief production
functions
No scale economies
Don’t allow the substitution of production factors
Economic Input-Output Life-Cycle Assessment
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IO Principles
•
Coefficient matrix
Direct effect
0
0,03 0,16 
 0,15
 0,01 0,22
0
0 

A
0,08 0,18 0,33 0,07


0,03
0
0,25
 0
•
Leontief Inverse
1,23
0,02
1
( I  A)  
 0,15

 0
0,14 0,55 0,31
1,28 0,01 0 
0,37 1,56 0,18

0,05
0 1,33 
multiplier s  1,40 1,84 2,12 1,82
The difference between the values is the due
to the indirect effect (in this case 0,37-0,18 =0,17)
In the principal diagonal which is > 1, the unit value represents
the increase in final demand in that sector, and the remaining
(0,33) is the direct and indirect impact of the expansion
Multiplier - Is the column sum, tells that the for an increase of 1 unit value production of that
sector, 0,84 worth of activity is generated, for a total value of production of 1,84 (due to
direct and indirect effects)
Economic Input-Output Life-Cycle Assessment
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IO Principles
•
Multipliers
–
–
–
–
Provide an information on the sector impact on the rest of the economy of a unit change in final
demand
Also called the “ripple effect”
Multipliers are explicated upon a domino theory of economic change. They translate the consequences
of change in one variable upon others, taking account of sometimes complicated and roundabout
linkages.
Besides the output multiplier, there are others types of multipliers like the employment and income
multipliers
Is a function of the economical structure, size of the
economy and the way exports and sectors are linked to
each others
Multiplier
Change over time
Change over regions
Economic Input-Output Life-Cycle Assessment
The sector importance depends of other
factors besides the multiplier
Energy Management
EIO-LCA
• The environmental extension of the input-output
framework is easily done, by only considering that the
amount of environmental impacts associated with one
industry is directly proportional to is output, in a fixed
proportion. Then:
B  b(I  Α) 1 Y
• Where:
– b is a q x n matrix which shows the amounts of
pollutants or natural resources emitted or consumed
to produce a unit of monetary output of each industry,
with
• q rows with environmental interventions (CO2,
CH4, etc…)
• n columns with industrial sectors
– B is a also a q x n matrix and represents the total
direct and indirect environmental impacts for each
industrial sector
Economic Input-Output Life-Cycle Assessment
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GWG Emissions in the Portuguese Economy
NAMEA
Unidade 10E6 escudos
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Agricultura e Caça
Silvicult. E Expl Flor.
Pesca
Carvão
Petróleo
Electr., Gás e Água
Min Fer. E não Fer.
Min. não Metálicos
Porcelanas e Faiança
Fab. Vidro e Art. Vid
Out. Mat. Construção
Produtos Quimicos
Produtos metálicos
Máq. Não Eléctricas
Maq. Out. Mat. Eléct.
Material Transporte
Aba. Cons. de Carne
Lacticínios
Conservação de Peixe
Óleos e Gord. Alim.
Prod.Cereais e Legu.
Out. Prod. Alimentar
Bebidas
Tabaco
Economic Input-Output Life-Cycle Assessment
Sox
(ton)
Nox
(ton)
COVNM
(ton)
CH4
(ton)
CO
(ton)
2595
176
984
25
53521
166933
5135
22843
1555
8668
7
7154
72807
1160
8042
342144
131
203083
12
529
7923
541
1094
54480
385
596
4725
152
55
4451
12084
27320
4417
224
19
130
69
667
1043
485
267
486
2246
1482
929
2689
2184
9531
3855
253
21
147
78
235
368
171
94
172
793
523
428
4417
52
4713
773
1052
173
207
3092
20
31
106
3050
1842
204
4710
9
464
150
1003
359
23
2
13
7
24
37
7997
10
17
12051
3591
37
CO2
(Kton)
N2O
(ton)
NH3
(ton)
7885
34
11
78072
1
1297
2240
49677
1464
92
482
2
2413
16135
597
6666
583
5967
20320
9
1
5
3
69
108
50
28
50
233
153
11
2268
894
6502
1485
46
4
27
14
61
96
141
25
48
351
213
70
73
9
75
3266
1
112
211
6
1
2
243
1
367
110
1
19
6971
Energy Management
Evolution of the contribution to the Portuguese GDP of
the main economic sectors between 1993 and 1995
1. Agriculture & hunting
2. Petroleum
8%
3. Chemical products
7.1%
6.6%
7%
% of GDP
6%
5%
4. Transport vehicles and equipment
5.5%
4.6%
4.7%
4.6%
4.0%
3.8%
4%
5. Textile & clothing industry
3.4%
2.9%
3%
6. Construction
2%
7. Restaurants & Hotels
1%
8. Financial services
0%
1
2
3
4
5
6
Economic Sectors
7
8
9
10
9. Services rendered for companies
10.Non-commercial services of
Public Administration
Economic Input-Output Life-Cycle Assessment
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Direct and indirect costs of the most important sectors
to fulfil the total demand in 1993 and 1995
Indirect 93
Direct 93
Indirect 95
Direct 95
1. Textile & clothing industry
12000
2. Construction
8
6
3. Transport vehicles and equipment
4. Agriculture & hunting
8000
106 Euros
21 19
5. Chemical products
24
22
23
30 30
20
6. Non-commercial services of Public
Administration
7. Financial services
4000
8. Services rendered for companies
9. Petroleum
10.Restaurants & Hotels
0
0
1
2
3
Economic Input-Output Life-Cycle Assessment
4
5
6
Economic Sectors
7
8
9
10
Energy Management
GNP and GWP per economic sector for the years of 1993
and 1995
1. Textile & clothing industry
2. Construction
60
3. Transport vehicles and
equipment
GNP & GWP x Sector

GNP
GWP
40
4. Agriculture & hunting
Percentage
5. Chemical products
20
6. Non-commercial services of
Public Administration
7. Financial services
0
0
1
2
3
4
5
6
Economic Sector
-20
7
8
9
10
8. Services rendered for
companies
9. Petroleum
10.Restaurants & Hotels
-40
Economic Input-Output Life-Cycle Assessment
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Environmental sustainability of the sectors (increase of
GNP versus increase of GWP)
40
7
20
3
2
% GWP
Non-sustainable
Weak Sustainability
5
1
0
-40
-20
0
9
84 Total
% GNP 20
Strong Sustainability
-20
6
-40
Economic Input-Output Life-Cycle Assessment
40
1.
2.
3.
4.
5.
6.
7.
8.
9.
Textile & clothing industry
Construction
Transport vehicles and equipment
Agriculture & hunting
Chemical products
Financial services
Services rendered for companies
Petroleum
Restaurants & Hotels
Energy Management
OBJECTIVES
•
Develop and assess EIO-LCA related tools. to promote fast and accurate life
cycle analysis of products and services.
•
Analyze a case-study to compare the different tools.
LCA
HEIO-LCA
EIO-LCA
Economic Input-Output Life-Cycle Assessment
Energy Management
Hybrid EIO-LCA
• The hybrid Input-Output analysis combines the bottom-up
approach of process-based LCA with the traditional top-down
economical technique Input-Output Analysis, developed by Wassily
Leontief 50 years ago
 ~
A


B  b b   

  L

~

M 
Y
I  A 
Foreground
 B, is the Total environmental intervention due to external demand
 ~b, is the environmental flow matrix for process analysis
 b, is the pollutant emission per $ of sector output
 Ã, is the technology matrix for process analysis, expressed in
various physical units per unit operation time for each process.
 M, is the foreground system matrix, and represents the total
physical output per total production in monetary term. It is
expressed in physical flow required to produce $ worth output of
each industry.
 L, is the foreground system matrix, which represents the
monetary input to each sector per given operation time, thus
expressed in monetary unit per time.
 A, is the matrix of inputs coefficients of traditional Input-output
analysis, with n x n sectors.
Economic Input-Output Life-Cycle Assessment
Background