Measuring the Environmental Impact of Consumption

Energy

In the first decades of environmental regulation, the main concerns related to production whereas consumption caught little attention. The main exception was the energy issue where the energy crisis in the 1970s called for regulation of consumer behavior. This called for knowledge about the energy impacts of consumption and raised questions such as, Which parts of consumption are the most energy consuming? Which groups of consumers use most energy? The energy studies from the 1970s pioneered methods that are still used and further developed.

The most basic question concerns the delimitation of consumption: What should count as consumption? If consumption is considered to be the ultimate aim of production, then all environmental impacts of economic activities should in principle be attributed to consumption. Consumers are not only “responsible” for the environmental impacts associated with the use of products and services in everyday life but also responsible for the effects associated with the provision of these products and services. In accordance with this perspective, energy studies usually cover both direct and indirect energy consumption. Direct energy consumption occurs when households buy energy carriers, such as fuel oil, gas, petrol, and electricity, and use it for heating or cooling their dwellings and for cooking, operating appliances, and driving their cars. Indirect energy use occurs in relation to the acquisition of all the goods and services where energy has been spent to provide them. Studies differ with regard to the assessment of the relative size of direct and indirect energy consumption, but in general, the indirect energy consumption is estimated to be just a big as the direct in Western households.

The calculation of the indirect energy consumption is not an easy task. For a specific product, a process analysis can describe the whole chain of processes involved in providing the product and the energy use associated with each stage. As this is a laborious method, which is not useful for macrooriented studies, energy researchers turned to study household energy consumption on the basis of economic [Page 936]input-output (IO) tables combined with information on energy production measured in physical units (Suh 2009). As this method is fundamental for much other work, the basics are explained in the following. A typical IO table describes economic flows within a year in a national economy: the total value of the production from each economic sector and the delivery of this production to other economic sectors (as intermediary input) and to final demand. Table 1 illustrates an input-output table in the simplest form (for simplicity, an economy with no trade is assumed). Z is an n n matrix showing the flows of interindustry (or sector) deliveries. The number of production sectors included in the table differs between countries. Often, only about 60 sectors are specified, but the most advanced tables are disaggregated into about 350 sectors. A row shows what a given sector delivers to other sectors, while a column shows what a sector receives from other sectors. The F matrix shows the deliveries from the producing sectors to final users, usually split into various categories of private consumption, government expenditure, and investment. Finally, the V matrix shows the deliveries of primary inputs (capital and labor) to the sectors (as the deliveries are measured in money terms, the V matrix represents “value added,” which is the same as the earnings of employees and capital owners).

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