Analyzing Canada’s Ecological Footprint Embodied in International Trade: A Unidirectional Multi-Regional Input-Output Approach by YU KUKI B.A. Hokkaido University, 2009 A THESIS SUBMITTED IN PARTIAL FULLFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF Master of Arts in Planning in The Faculty of Graduate Studies THE UNIVERSITY OF BRITISH COLUMBIA (Vancouver) June, 2011 ©Yu Kuki 2011 Abstract The ‘Ecological Footprint’(EF) of a specified population is a comprehensive sustainability index that estimates the ‘bio-capacity‘ (hectares of global average productivity) required to produce the resources consumed by that population and assimilate its carbon emissions. The greater the population’s material consumption and waste production, the larger its eco-footprint (EF). The standardized method for Ecological Footprint Analysis (EFA) is maintained and regularly updated by the Global Footprint Network (GFN), a non-profit organization in California. In recent years, various EF analysts have experimented with wedding Input-Output (I-O) analysis to the standard method. I-O based models are potentially superior for estimating the trade portion of the footprint because: (1) they account for country-specific technological efficiencies when estimating the trade component of eco- footprints (rather than world-average techno-efficiency); (2) they account for the service-related consumption which is absent from the existing method; and (3) they provide more detail on the origins of the imports. This thesis contributes to I-O based ecological footprint estimates. I develop a unidirectional trade-inclusive multi-regional input-output (MRIO) model for Canada using 2005 data. The results show that Canada relies for about 25% of its consumption-related resource needs on bio-capacity imported from other countries, compared to 44% using the GFN approach. Over 60% of Canada’s import-embodied footprint comes from the U.S. and China. Food-related sectors including agriculture were the largest contributors to Canada’s footprint overseas. Overall, my MRIO model yields a larger EF for Canada (9.77 gha) than the GFN standard method (7.33 gha). This difference is explained by the fact that the GFN standard method overestimates the footprint of exports for Canada (which presumably has production efficiencies that are higher than world-average) and hence leading to an underestimate of the footprint of consumption. Therefore, I conclude that while the MRIO approach is possibly more accurate, the important finding is that the two methods mutually reaffirms the fact that Canadians on average use four to five times more bio-capacity compared to their “fair share”. I discuss several policy implications of my analysis from an environmental, economic and social perspective using an interregional analytic framework. ii Table of Contents Abstract ........................................................................................................................................................................... ii Table of Contents ...................................................................................................................................................... iii List of Tables ................................................................................................................................................................. v List of Figures.............................................................................................................................................................. vi List of Acronyms ....................................................................................................................................................... vii Acknowledgements .............................................................................................................................................. viii Chapter 1: Introduction ......................................................................................................................................... 1 1.1 Purpose of this Thesis .............................................................................................................................. 1 1.2 Problem Statement and Rationale of the Study ........................................................................... 3 1.2.1 Human Prosperity and Ecosystems Decline ......................................................................... 3 1.2.2 Economic Growth or “Uneconomic”Growth? ...................................................................... 4 1.2.3 Accounting for the Earth ................................................................................................................ 7 1.2.4 Thinking Sustainability in an Interconnected World........................................................ 9 1.2.5 Calculating Embodied Resource Use in Trade .................................................................. 11 Chapter 2: Methods ............................................................................................................................................... 13 2.1 Review of the Existing NFA Method ................................................................................................ 13 2.1.1 Bio-capacity and Ecological Footprint Calculations ....................................................... 13 2.1.2 Shortcomings of the Existing Method ................................................................................... 18 2.2 Concept and Theory of the Input-Output Based Method ..................................................... 19 2.2.1 Conceptual Framework ................................................................................................................ 19 2.2.2 Brief History of the Input-Output Analysis......................................................................... 22 2.2.3 Input-Output Tables ...................................................................................................................... 22 2.2.4 Theory of I-O Based Ecological Footprint Calculation .................................................. 26 2.2.5 Extending the I-O Analysis to Estimate Ecological Footprints .................................. 28 2.3 Multi-Regional Input-Output Model ............................................................................................... 31 2.3.1 Three MRIO Model Scenarios.................................................................................................... 31 2.3.2 The Model Used in this Thesis .................................................................................................. 35 Chapter 3: Constructing the Unidirectional Trade MRIO Model ............................................... 36 3.1 Structure of the Model........................................................................................................................... 36 3.2 Data Sources............................................................................................................................................... 38 3.2.1 Summary ............................................................................................................................................. 38 3.2.2 Input-Output Tables ...................................................................................................................... 39 3.2.3 Bilateral Trade Database (BTD) ............................................................................................... 42 3.2.4 National Footprint Account (NFA) .......................................................................................... 44 3.2.5 Other data ........................................................................................................................................... 44 3.3 Assumptions and Limitations ............................................................................................................ 44 3.3.1 Base Year Difference Between I-O Tables and BTD ........................................................ 44 3.3.2 Approximations Using Proxies ................................................................................................. 45 3.3.3 Sector Aggregation ......................................................................................................................... 45 Chapter 4: Results .................................................................................................................................................. 46 4.1 Summary........................................................................................................................................................... 46 4.2 Ecological Footprint of Imports (EFI) ................................................................................................. 47 4.2.1 By Trading Partner Countries ........................................................................................................ 47 4.2.2 By Industrial Sectors .......................................................................................................................... 52 4.3 Ecological Footprint of Consumption (EFC) ..................................................................................... 54 iii 4.4 Ecological Footprint of Exports (EFE) ................................................................................................. 56 Chapter 5: Discussion and Conclusion ...................................................................................................... 58 5.1 Discussion ..................................................................................................................................................