Valeria Costantini, Massimiliano Mazzanti and Anna Montini
This book is an integrated collection of complementary essays that revolve around the issue of environment-economic accounting, an analysis of which is crucial to assessing the static and dynamic performance of economic systems. Environmental and industrial policies also receive support from this framework of analysis, especially due to the detailed sector-based knowledge that settings such as NAMEA- type tables (National Accounting Matrix including Environmental Accounts) and Input–Output (I–O) provide. We aim to highlight studies focusing on the analysis of national or regionalized NAMEA through econometric and decomposition analyses and studies that try to link and merge NAMEA and I–O tables. To some extent, the book starts from and builds on what was explored in Part II of Mazzanti and Montini’s Environmental Efficiency, Innovation and Economic Performance (2010).
The generation of richer and longer NAMEA datasets, both in the sectoral and temporal directions, has been matched by an increasing analytical effort over the last decade. Contributions by de Haan (2004), de Haan and Keuning (1996), Mazzanti and Montini (2010b) and Mazzanti et al. (2008) have emphasized the usefulness of NAMEA datasets for econometric investigations covering a number of different economic aspects.
It is worth noting that Eurostat has intensified its commitment to reach a full EU27 NAMEA, which has been released in 2011. It covers EU27 countries on 2000–2006 and is primarily aimed at sustaining EU research efforts and policy- making in the joint realms of resource efficiency (RE) and sustainable consumption and production (SCP), two EU strategic environmental pillars. This effort is considered a silver bullet of the EU strategy on data generation and policy support since it is recognized as a powerful instrument for assessing sustainable production and consumption performances (Watson and Moll, 2008; Moll et al., 2007; EC, 2011; Eurostat, 2011). In line with the increasing EU emphasis on resource efficiency and decoupling targets, this ‘economics of SCP’ framework also includes as far as possible environmental innovation and its diffusion at sector and geographical levels as a key element of understanding (Kemp and Pearson, 2007; Popp, 2002). The research directions we deal with therefore offer a macro/meso perspective to sustainability.
This integrated EU data production adds to the historical national NAMEA dataset generation that in Italy, for example, is currently presenting a full 1990–2008 NAMEA with 60 NACE economic activities and three household categories. A new wave in data generation regards the ‘regionalization’ of the NAMEA which has brought new possibilities to the research ground since it considers both regional and sector dimensions. These regionalized NAMEAs maintain many different pollutants or aggregated environmental themes differentiated by their geographical distribution such as a more global climate change issue or a more localized acidification process. Interesting results may arise from application to a regional NAMEA as far as the role of innovation spillovers and environmental externalities on behaviours and location decisions by economic agents is concerned.
On the other hand, the integration of NAMEA-type tables and Input–Output (I–O) tables is a challenging but promising way to analyse the factors behind income-environment relationships in international settings (Cole, 2004; Copeland and Taylor, 2004; Frankel and Rose, 2005). More specifically, it allows disentangling of production and consumption perspectives, as far as the air emissions context is concerned,1 through detailed sector-based information provided by the two frameworks. National and international sources of environmental effects can be ascertained in strict connection with streams of literature such as the ecological footprint kind of analysis and trade-oriented decomposition analyses.
Many types of analysis on the relationship between economic systems and the environment identify structural changes in production and consumption patterns as key drivers of environmental performance (‘composition effect’ in the environmental Kuznets curve (EKC) literature; see Mazzanti and Montini, 2010a). In addition to more qualitative assessments of the role of structural change in consumption and production, Input–Output analysis is a powerful analytical tool for investigating the role of change in the composition of final demand and the structure of intermediate inputs in determining aggregate environmental performance.
When specifically looking at international issues revolving around the environmental sustainability of countries, the integration between NAMEA and I–O is meaningful and even necessary when investigating to what extent changes in final consumption patterns, production technologies and trade patterns (as a result of the decoupling of consumption from production) affect domestic and world-induced air emissions. Furthermore, Input–Output analysis allows us to quantify to what extent geographical separation between consumption and production activities has occurred and whether it has determined increases (following the pollution haven hypothesis) or decreases in global environmental pressures. An analysis of the environmental pressures induced by vertically integrated sectors can be used to identify which categories of final demand were responsible for global environmental pressures.
This collection of essays tries to capture the aforementioned developments as far as possible, guiding the reader through the many specific as well as heterogeneous issues related to hybrid economic-environmental accounts.
The book is structured in two parts. After a historical background and empirical issues related to the NAMEA-type table definitions and estimations provided by Tudini and Vetrella and Stauvermann, the first part presents some applications and analyses mainly applied to the Italian context, with an insight into advancements made with regard to the regional NAMEA. The first chapter by Tudini and Vetrella (Chapter 1) sets out the methodological fundamentals of NAMEA. Its weaknesses offer room for improving analysis and a rationale for integration with other sources. The following chapter by Stauvermann (Chapter 2) presents the rationale behind the two possible approaches in the environmental accounting system (with some reference to the Dutch case), with or without monetization of the environmental damage, by comparing green accounting with a hybrid accounting approach.
Costantini et al. (Chapter 3) present the results of the first econometric- oriented analysis on the newly released Italian regional NAMEA. Their analysis of potential drivers for explaining the geographical distribution of environmental performances, greenhouse gases and acidification emissions reveals that technological and environmental efficiency spillovers are highly relevant. Bonazzi and Sansoni (Chapter 4) on the one hand, and Dalmazzone and La Notte (Chapter 5) on the other, offer further analyses by using regionalized NAMEA accounting for Emilia-Romagna, Piedmont and Lombardy, three major Northern Italian regions. These works extend the preliminary analysis of the 2000 Lazio regional NAMEA proposed by Mazzanti and Montini (2010b). The set of regional NAMEA works highlights the skyrocketing properties of such data frameworks for joint economic, environmental, regional and innovation studies.
A decomposition analysis applied to new Italian data performed by Femia and Marra Campanale follows in Chapter 6. They find that, in the Italian case, the amount of greenhouse gas (GHG) emissions displaced abroad, although not high in relative terms, denotes a significant displacement of the Italian GHG emissions towards the rest of the world, due to the growing share of imports in the final demand for products of the manufacturing industries and in the intermediate demand of these industries. If we care about the global climate, displaced emissions must also be measured and considered in global and national policies and targets.
The last work conceptually links Parts I and II of the book insofar as it deals with international and trade issues that are important when studying sustainable consumption and production dynamics.
Part II opens the window to international case studies for different EU countries and studies with methodological insights. We cover a few EU countries (Italy, Spain, Greece, Czech Republic).
Rueda-Cantuche (Chapter 7) develops a theoretical multi-regional framework (in two regions, Europe and the Rest of the World) with which the European carbon footprint can be calculated under the ideal conditions of full information availability. He shows three different approaches based on assumptions essentially related to production technology and emission coefficients by region. He concludes that the assumption of domestic emission coefficients has serious consequences for the estimation of the European carbon footprint mainly due to the fact that it does not capture the changes in the import shares of intermediate and/or final uses. The chapter by Marin et al. (Chapter 8) discusses how to join I–O and NAMEA from a conceptual point of view and the potentialities for research and policy-making. They also present new evidence on Italy and Spain with the aim of disentangling production and consumption environmental responsibilities, according to different levels of productive sectors aggregation, thereby addressing the so-called ‘aggregation bias’. Their empirical findings, for the Italian and the Spanish cases, show that different sectoral aggregations produce significantly biased estimations of the amount of emissions both from a consumption perspective and a production perspective. This result suggests that particular attention should be paid to the interpretation of environmentally extended Input–Output analyses (EE-IOA) of country estimated amounts of embodied emissions, both in the domestic final demand and in those directly associated with the productive sectors, when the sectoral aggregation level has a low definition as considered in some recent similar studies. The work is the final version of a research effort that began with a presentation at the international conference The Structure of Economic Systems through Input–Output Applications (Accademia Nazionale dei Lincei, Rome, 21–22 October 2010).
TarancÓn and del Río (Chapter 9) present a methodological study with a classification of applications of the Input–Output model applied to environmental issues in the context of changes in Input–Output coefficients. They analyse the variability of the coefficients and review different techniques to analyse the sensitivity of NAMEA variables to changes in the productive structure of activity branches. Basina et al. (Chapter 10) analyse the emissions caused by conventional energy production methods and, specifically, by the combustion of lignite to generate electricity in Greece. They also analyse a reduction in emissions brought about by the possible replacement of lignite with solar energy in the production of electricity and, specifically, the use of photovoltaic technology. Calculations are made on the basis of the 2005 NAMEA table for the Greek economy as well as the domestic operational programme for the period 2007–2012 which considers the country’s compliance with Kyoto Protocol requirements.
A lens on Eastern Europe is proposed by ŠčasnÝ and Tsuchimoto (Chapter 11), who utilize index-based statistical decomposition to examine which factors were active in changing the emission level of three pollutants, SO2, NOx and PM, during the transition and post-transition periods of the Czech economy (1997–2007). With a four-factor decomposition analysis on the year-by-year changes, they are able to distinguish the abatement effect due to output reduction, the one due to fuel intensity changes and lastly the effect of abatement reached through the installation of end-of-pipe technologies or through a fuel switch towards more environmentally friendly energy carriers.
Finally, we would like to thank all the contributors and colleagues who have taken part in this specific research effort and have worked intensively with us over the past years. Many of them are authors in this book.2 Of those who have not participated in this book, we would particularly like to thank Roberto Zoboli. Roberto has always enriched our research with his brilliant and stimulating way of thinking and suggestions on how to interpret environmental and economic phenomena. This is the proof that, rather than a collection, this work is a tangible demonstration of the research efforts and ideas that we have tried to develop and exchange. We believe that this book is a platform that can guide us towards new research achievements and ideas in an even brighter future for environmental and ecological economics studies. Given that this book talks about hybrid phenomena and connections between the economic and environmental worlds, Massimiliano Mazzanti wishes to remember Alexander Langer, a man who devoted his life to creating links and bridges between apparently different realities, languages and cultures in order to demonstrate the richness and value of hybrid and mixed things in the human world.
Notes
1 Future developments in NAMEA-type tables involve water and soil emissions. A specific issue of ‘dispersion of toxic substances’ that also covers pollution of water and soil by pesticides and other substances, such as heavy metals and dioxins, addresses the methodological problems to be solved.
2 It is worth noting that some of the authors presented papers that dealt with NAMEA/I–O use at the last I–O Society Conference in Sydney 2010. José Rueda-Cantuche won the Leontief prize there.
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