Environmental Impact
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Definition
Environmental Impact (or Environmental Stressor) in the context of an Input-Output Model denotes an extension of the basic IO model via a system of satellite accounts that provides insights into the environmental footprint of economic activity
Approach
Each MRIO's environmental CBA result can be understood simplistically as a product of three variables:
- a flow matrix Z describing the economic structure
- an environmental stressors matrix (or ‘satellite account’) F describing the per-sector direct environmental impacts of production
- a consumption bundle Y describing the composition of final consumption.
The total CBA footprint C is a function of these three variables: .
In addition to the output effects, implications can be derived for the value-added components and the satellite systems. Various production-induced effects can be calculated by multiplying with the coefficients s
Formula
where
- Vector of specific satellite accounts
- Vector of coefficients for satellites.