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Using Time-Series To Measure Uncertainty In Environmental Input-Output Analysis

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  • Asuka Yamakawa
  • Glen Peters

Abstract

Environmental Input-Output Analysis (EIOA) is a tool for environmental analysis of broad classes of sectoral activities, taking into account indirect effects in other sectors in the supply chain. The core of EIOA is an input-output table (IOT) and national accounting matrix including environmental accounts (NAMEA) for a fixed base-year. We evaluate the uncertainty in EIOA using a time series of current-price IOT and NAMEA for 13 years from 1990 to 2002. We find annual variations in the current-price IOT and NAMEA, which may represent either realistic changes in production or measurement error. We assume the changes are errors and apply a regression analysis to remove the trends from the underlying data and estimate the uncertainty in the raw IOT. We then calculate the emissions for various final users and sectors to estimate the uncertainties from typical EIOA investigations. Using Monte Carlo analysis, we then investigate how well the variations in the current-price IOT and NAMEA over time may represent uncertainties. The results of this work have several implications for both statistical offices and the analyst. Statistical offices can provide details on data sources, methodologies, and estimates of annual variations. Analysts can incorporate this uncertainty information to understand the implications of uncertainty on their calculations and ultimately the policy recommendations derived from their studies.

Suggested Citation

  • Asuka Yamakawa & Glen Peters, 2009. "Using Time-Series To Measure Uncertainty In Environmental Input-Output Analysis," Economic Systems Research, Taylor & Francis Journals, vol. 21(4), pages 337-362.
    • Handle: RePEc:taf:ecsysr:v:21:y:2009:i:4:p:337-362
    DOI: 10.1080/09535310903444766
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    References listed on IDEAS

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    1. Bruce E. Hansen, 2000. "Sample Splitting and Threshold Estimation," Econometrica, Econometric Society, vol. 68(3), pages 575-604, May.
    2. Sangwon Suh & Shigemi Kagawa, 2005. "Industrial ecology and input-output economics: an introduction," Economic Systems Research, Taylor & Francis Journals, vol. 17(4), pages 349-364.
    3. Glen Peters & Edgar Hertwich, 2006. "Structural analysis of international trade: Environmental impacts of Norway," Economic Systems Research, Taylor & Francis Journals, vol. 18(2), pages 155-181.
    4. Leontief, Wassily, 1970. "Environmental Repercussions and the Economic Structure: An Input-Output Approach," The Review of Economics and Statistics, MIT Press, vol. 52(3), pages 262-271, August.
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    Cited by:

    1. Halkos, George & Tzeremes, Nickolaos, 2011. "Does the Kyoto Protocol Agreement matters? An environmental efficiency analysis," MPRA Paper 30652, University Library of Munich, Germany.

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