Input-Output Analysis of Material Flows: an application to the German Economic System for the year 1990

Material flows from the envirornment to economic activities constitute a valid basis for the construction of useful, policy-oriented indicators of the potential damage to nature deriving from these activities. Not only direct intake is relevant, but also the "upstream" activation of material. flows through demand for intermediate inputs must be considered in order to assess the envirornmental impact of a certain activity. Input-output analysis provides both a sound methodological basis and a suitable description of the interconnection of economic activities, and can therefore be very useful in the construction of sector-level indicators which respond to this principle. An example of the potentials of input-output analysis is given here, with an application to data referring to the German economy in 1990. We provide and describe a re-allocation of material inputs among final uses, and discuss two examples which are relevant for policy. The existing limitations to this kind of analysis are briefly discussed, leading to the conclusion that it is of the utmost importance to develop national and supra-national systems of Material Flows Accounts, which would provide the necessary information for policy-making.