1 Measuring the resource intensity of production and consumption Edgar G. Hertwich Industrial Ecology Programme Norwegian University of Science and Technology OECD/UNEP conference on resource efficiency Paris 23-25 April 2008 Edgar,hertwich@ntnu,no, www,ntnu,no/indecol 2 Outline • Tools for resource efficiency • The value chain • Resource use and value added • E2 vector – resource efficiency graphs • Relating production and consumption • The impacts of consumption • Conclusions Edgar,hertwich@ntnu,no, www,ntnu,no/indecol 3 Resource efficiency Substances Materials Products Businesses Business- Business Life-cycle level SFA level MFA assessment Economic Industry- Physical IO Eco- Activities level SFA analysis efficiency benchmarks Nations, Economy- Economy- Environment globe wide SFA wide MFA al input- output analysis Edgar,hertwich@ntnu,no, www,ntnu,no/indecol 4 Resources • Biotic resources • Fossil resources • Mineral resources • Land • Water •Air • Health, functioning ecosystems, genetic diversity, life-support systems Edgar,hertwich@ntnu,no, www,ntnu,no/indecol 5 Production & Consumption Consumption Transport Resources Waste treatment added Health Production Value a Value Value chain Edgar,hertwich@ntnu,no, www,ntnu,no/indecol 6 Resource intensity defined This definition is standard for energy intensity and has become well established as emissions intensity. urce use Resource use ≡ Resource intensity Value added Resourc Value added ≡ Resource efficiency Resource use Value added Edgar,hertwich@ntnu,no, www,ntnu,no/indecol 7 The Eco-Efficiency Vector Chemical base Agri- E2 vector for products culture the Netherlands Direct environmental Electricity impacts divided by e value added per industry us Transport sector and storage ce ce Mark Goedkoop, PRe esour Oil and gas Business services R extraction Trade Value creation 53 other sectors, invisible Edgar,hertwich@ntnu,no, www,ntnu,no/indecol 8 The Importance of Industries Oil & Gas Trade e Transport Business services Electricity urce us so The Netherlands Reso Agriculture E2 vector for the Netherlands Chemicals Mark Goedkoop, PRe Value added Edgar,hertwich@ntnu,no, www,ntnu,no/indecol 9 The Importance of Goods Buildings&furniture Trade and services e Transport Oil & Gas urce us Food so The Netherlands Reso Hypothetical E2 vectors for all goods consumed Electricity in the Netherlands Chemicals Consumption Expenditure Edgar,hertwich@ntnu,no, www,ntnu,no/indecol 10 Resource intensity of a product Insurance & fees Recycling Driving use Car life cycle rce Gasoline Resourc Car manufacturing Value added Edgar,hertwich@ntnu,no, www,ntnu,no/indecol 11 Why is this relevant? • Resource/pollution intensity can be consistently defined across various scales. – For a company, it is resource use per value added of the company. – For a product, it is life-cycle resource use per unit cost of the product – For an industry, it is total resource use divided by total value added in the industry – For a nation, it is total resource use divided by GDP. Edgar,hertwich@ntnu,no, www,ntnu,no/indecol 12 Vector addition RU(A) + RU(B) RI(A + B) = VA(A)+ VA(B) • The total resource use of a country can be defined as the sum of individual resource use • The total value added of a country can be defined as the sum of value added in all economic activity going on in a country • It is meaningful to compare the RI of a product or company to the RI of products, companies, industries, and countries. Edgar,hertwich@ntnu,no, www,ntnu,no/indecol 13 Input-output analysis … allows us to convert the resource intensity of industries in an economy to the resource intensity of goods produced by the economy. Life cycle assessment … allows us to convert the resource intensity of processes to the resource intensity of product systems. Hybrid IO-LCA … can bridge any scale in between and consistently analyse activities across scales. Edgar,hertwich@ntnu,no, www,ntnu,no/indecol 14 Production & Consumption The resources used in the production of goods = The resource footprint caused by the consumption of the goods The value added in the production of goods = The price of the goods to the consumer Edgar,hertwich@ntnu,no, www,ntnu,no/indecol 15 Prioritization Scientific prioritization of products and resources from an environmental sustainability point of view • Input-output based studies have been used to identify the product and final demand categories that cause the largest impacts. • EIPRO study Edgar,hertwich@ntnu,no, www,ntnu,no/indecol 16 Emissions from Norwegian household consumption 5.2 t/p 14 kg/p 23 kg/p 100 % 80 % Other Recreation 60 % Other mobility Vehicle fuel Care Clothing 40 % Food Other shelter Household energy 20 % 0 % CO2 SO2 Nox Edgar,hertwich@ntnu,no, www,ntnu,no/indecol 17 7.1 21 8.5 8.0 5.2 5.4 4.8 3.9 7.8 5.6 24 100 % 80 % Other Recreation Other mobility 60 % Vehicle fuel Care 40 % Clothing Food Other shelter O2 EmissionsO2 (t/capita-y) CO 20 % Household energy 0 % F 1990 D 1990 N 2000 A 2000 A NL 1990 DK 1992 2000 SK JP 1995T JP 1995N USA 1997USA CO2 emissionsAUS 93/94 in tons per capita and year Hertwich (2005) Environmental Science & Technology 1 Edgar,hertwich@ntnu,no, www,ntnu,no/indecol 18 Prioritization – what do we know? • Limited number of environmental pressures is considered • Studies consistently find that the most important areas are – Buildings, including energy use in buildings, constr – Food – Transportation • Poor countries: food is important • Rich countries: transportation important • Geographical factors, like density and climate, influence results. Edgar,hertwich@ntnu,no, www,ntnu,no/indecol 19 Conclusions • Input output analysis and hybrid analysis let us consistently define resource intensity. • Resource intensity can be calculated for, and compared among, individual processes, facilities, consumption activities, households, regions, industry sectors, and nations. • Useful information also for local decision makers, e.g. in municipalities or corporate purchasing departments Edgar,hertwich@ntnu,no, www,ntnu,no/indecol 20 Edgar,hertwich@ntnu,no, www,ntnu,no/indecol 21 The Norwegian Economy 16 14 Water transport Oil&gas 12 10 ions [Mt] 8 6 Chemicals CO2 emissio 4 Land transport 2 Construction Trade Real estate and services 0 0 50 100 150 200 250 300 350 Value added [billion Kr] Edgar,hertwich@ntnu,no, www,ntnu,no/indecol 22 Economic activity caused by consumption x=Ax+y x … Economic output of each industry sector -1 y … Final consumption of each sectors output x=() I-A y A … Coefficient matrix, indicating the inputs required to produce one unit of output in each industry sector. Input-output economics and life-cycle assessment have a similar mathematical structure. We assume a linear relationship of the flows among different nodes in a production network. Edgar,hertwich@ntnu,no, www,ntnu,no/indecol 23 Value added • We can do the same for value added (e.g. labour) v = i Fi xi • Notice we normalize with respect to output (x) and not demand (y), so… − vFxFIA==() −1 y Edgar,hertwich@ntnu,no, www,ntnu,no/indecol 24 Life cycle assessment of consumption = ()−1 IyLC CS I - A Edgar,hertwich@ntnu,no, www,ntnu,no/indecol 25 Modelling the entire life-cycle Electrici Dinner Waste mgmt Pizza ... ty ... Contrary to IO analysis, the A matrix also ... includes processes in households, such as Pizza apd the heating of a frozen pizza or the Electrici a combustion of fuel in a ty ed A A moped. Waste ii ih mgmt ... Dinner a Ahi dw Ahh Edgar,hertwich@ntnu,no, www,ntnu,no/indecol 26 Technology 1 2 FD Output 1 0.15 0.625 175 500 2 0.08 0.05 340 400 VA 0.13 0.35 0 205 CO2 1.0 0.1 10 Electricity is CO2 Manufacturing uses electricity intensive intensively Edgar,hertwich@ntnu,no, www,ntnu,no/indecol 27 Driving Car manu Petrol Final demand Driving 0 1 Car manu 1 Petrol 10 VA 0 RU 10 Edgar,hertwich@ntnu,no, www,ntnu,no/indecol.