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SOEE5582:  Tools and Techniques in Ecological Economics

Assignment: Input-Output Analysis

(100% of final grade)

Aims and objectives

· Critical understanding of input-output analysis

· Ability to perform and interpret calculations using Python

· Formulation of a research report

Problem Description

Accounting for emissions from consumption is gaining political traction and countries, such as the UK, have made a commitment to report on their consumption-based carbon emissions alongside territorial and production-based accounts. When designing policy it is important to understand the environmental implications of changes in both consumer behaviour and the emissions intensity of industry.

Project Details

The task for this project is to write Python code to compile an Environmentally Extended Multiregional Input-Output (MRIO) database. You will use the WIOD database introduced in class to calculate the consumption-based account for a country of your choice. You are not permitted to use the UK. You will then create scenarios exploring how the consumption-based emissions might change for some point in the future based on real-world evidence that you have found. You can choose the future year because it may depend on the data and specific policies that you have found for your country.

Assignment

1. Compile an Environmentally Extended MRIO database with the WIOD database provided.

2. Calculate the CO₂ consumption-based account for your chosen country for the years 1995-2009. You may want to compare the consumption-based account with the production-based account.

3. Use your MRIO database to investigate future scenario(s). Your scenarios can alter:

a. Final demand. You could investigate how a future population might spend more in total (due to increases in population); buy more of some goods and less of other goods; and change where they buy their goods from

b. Carbon intensity of production. Will some industries produce the same amount of output with fewer carbon emissions in the future?

4. Calculate at least two different future scenarios, each showing an alternative future carbon footprint. Try to base your futures on real-world evidence. Find examples of policies that may alter consumption behaviour or the efficiencies of industry. Does your country have a target for reducing emissions? You can use evidence from your country of choice or assume that your country might follow best practice policies from a similar country.

5. Analyse and interpret your results

6. Write up an individual report of your findings including a critical discussion of advantages and limitations of this approach/model and possible applications. Make sure you connect your work to the wider literature.

Report structure

The 3000-word report should be structured like an academic paper. You are encouraged to follow this general structure:

1. Introduction: should include a rationale for the work, critical understanding of the wider literature (both directly relevant and background material for context) and overview of the report structure

2. Data and Methodology: should include a clear description of both the methodology and justification of the data selection used for the analysis

3. Results: should include a description of the results obtained (as well as relevant graphs, tables, and figures), a critical evaluation of the results obtained and an understanding of their uncertainties and limitations.

4. Discussion and Conclusion: should include a critical interpretation of your results, both with respect to your specific objectives and the wider existing literature, a discussion about the strengths and limitations of input-output analysis and a synthesis of the main conclusions.

Assessment Criteria for IO

In each of these categories, the presentation of the work (e.g. written style, clarity of expression, correct use of references, consistent referencing system, spelling, grammar and layout) will be assessed.

1. Introduction (20 %)

- Clarity of aims and objectives

- Critical understanding of literature and wider context

- Research project structure (coherence and flow) 

2. Data and Methodology (20 %)

- Critical understanding of Input Output analysis (including strengths and limitations of the methodology)

- Choice and justification of data for scenario modelling. What evidence have you used for scenarios?

- Application of environmentally extended input output analysis (assessed through the supporting material you email us, e.g. .ipynb code)

3. Results (30 %)

- Description and presentation of results

- Critical evaluation of your results, both in themselves and in the context of the wider literature

- Awareness of uncertainties and limitations associated with results

4. Discussion and conclusion (30 %)

- Critical interpretation of your results, both with respect to your specific objectives and the wider existing literature and including strengths and limitations of the methodology.

- Synthesis of the main conclusions

Writing and referencing

A high standard of writing and critical analysis is expected for this assignment. Students are expected to use the university's version of the Harvard referencing style. Guidance on how to include citations within text and how to reference different types of material using the Harvard style

References:

Use this paper to reference the input-output data:

Timmer, M. P., Dietzenbacher, E., Los, B., & Stehrer, R. (2015). An Illustrated User Guide to the World Input – Output Database: the Case of Global Automotive Production. Review of International Economics, 23(3), 575–605. http://doi.org/10.1111/roie.12178

Other useful references:

For evaluating Consumption Based Approaches and input-output analysis:

Afionis, S., Sakai, M., Scott, K., Barrett, J., & Gouldson, A. (2017). Consumption-based carbon accounting : does it have a future? WIREs Clim Change, 8, 1–19. http://doi.org/10.1002/wcc.438

Wiedmann, T., Wilting, H. C., Lenzen, M., Lutter, S., & Palm, V. (2011). Quo Vadis MRIO? Methodological, data and institutional requirements for multi-region input–output analysis. Ecological Economics, 70(11), 1937–1945. http://doi.org/10.1016/j.ecolecon.2011.06.014

For citing the input-output methodology:

Kitzes, J. (2013). An Introduction to Environmentally-Extended Input-Output Analysis. Resources, 2, 489–503. doi:10.3390/resources2040489

Miller, R. E., & Blair, P. D. (2009). Input-output analysis: foundations and extensions. Cambridge University Press.

For thinking about scenarios:

Barrett, J., & Scott, K. (2012). Link between climate change mitigation and resource efficiency: A UK case study. Global Environmental Change, 22(1), 299–307.doi:10.1016/j.gloenvcha.2011.11.003

Scott, K., Giesekam, J., Barrett, J., & Owen, A. (2018). Bridging the climate mitigation gap with economy-wide material productivity, 1–14. doi:10.1111/jiec.12831

Wiebe, K. S., Bjelle, E. L., Többen, J., & Wood, R. (2018). Implementing exogenous scenarios in a global MRIO model for the estimation of future environmental footprints. Journal of Economic Structures. doi:10.1186/s40008-018-0118-y

Wood, R., D. Moran, K. Stadler, D. Ivanova, K. Steen-Olsen, A. Tisserant, and E.G. Hertwich. 2018. Prioritizing Consumption-Based Carbon Policy Based on the Evaluation of Mitigation Potential Using Input-Output Methods. Journal of Industrial Ecology 22 (3): 540–552