Using Input‐Output Analysis to Measure the Environmental Pressure of Consumption at Different Spatial Levels

Input‐output modeling is a useful tool for tracing environmental impacts of consumption. Because it includes impacts originating from production layers of infinite order (capturing the entire economy), input‐output modeling is highly relevant for studies operating in a life‐cycle context. In this article we show how the input‐output approach can be used to enumerate the problem of sustainable consumption. Based on a literature survey including research done by the authors we present measures of the emissions of carbon dioxide at different spatial levels: nation, city, and household. Further, we take more environmental effects into account and introduce the concept of environmental efficiency by combining input‐output modeling and data envelopment analysis. Finally, we discuss the policy relevance of the different measures. The article demonstrates that input‐output modeling has a wide range of life‐cycle oriented applications when combined with other data sources such as detailed trade statistics, foreign input‐output and environmental statistics, and household expenditure data.