Archive:Carbon dioxide emissions from final consumption in detail

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This article provides an estimate based on various data sets of the European Union (EU) emissions of carbon dioxide (CO₂) induced by the final use of products. Eurostat estimates the EU's CO₂ emissions from final use to be 9 tonnes per capita per year.

The modelling-estimations are based on environmentally extended input-output tables which have been compiled for the very first time for the aggregated EU. The integrated data form a powerful basis for researchers and policy advisors – some illustrative examples related to environmental and macro-economic policies are presented in this statistical article.

Figure 1: Domestic and global CO₂-emissions - production and consumption perspective, EU-27, 2006 (tonnes per capita) - Source: Eurostat (env_ac_ainacehh) and (env_ac_io)

Main statistical findings

Table 1: CO₂-emissions induced by final use, by product groups and categories of final use, EU-27, 2006 (kg per capita)- Source: Eurostat (env_ac_io)

Figure 2: EU employment (compensation of employees) induced by final use (million euro), 2011 - Source: Eurostat

Figure 3: Share of imports in the total use of selected products, EU-27, 2006 (in %)- Source: Eurostat (naio_15_agg_60)

Figure 4: Share of exports in total use of selected products, EU-27, 2006 (in %)- Source: Eurostat (naio_16_agg_60)

Table 2: Supply and use tables at basic prices and CO₂-emissions by industries, EU-27, 2006 (million euro) - Source: Eurostat (naio_15_agg_6) (naio_16_agg_6i) and (env_ac_ainacehh)

Table 3: Symmetric input-output table at basic prices - domestic and imports, EU-27, 2006 (million euro) - Source: Eurostat (naio_17_agg_6)

Carbon dioxide emissions associated with EU consumption

As an example, the environmentally extended supply, use and input-output tables (EE-SUIOT) have been used to estimate the CO₂-emissions induced by the final use of products within the EU (data on emissions of 7 other gases are also available). Beside the CO₂-emissions emitted by EU industries in order to create products for final use, this estimate also takes into account CO₂-emissions "embodied" in imports to the EU. The latter arise along the worldwide production chains of imported products. CO₂-emissions "embodied" in products exported out of the EU go on the account of consumers abroad.

The total of 9 tonnes CO₂ per capita (t/cap) associated with EU final use in 2006 is composed of three main elements (see Figure 1, right hand bar, as well as Table 1):

the biggest part of 5.6 tonnes per capita is due to the consumption expenditures of goods and services purchased by households and governments;
a further 1.9 t/cap are due to direct CO₂-emissions by EU's private households from burning fossil fuels for private cars and heating;
another 1.6 t/cap are due to investments (capital formation) in the EU economy (see also Table 1).

Carbon dioxide emissions from a production perspective

CO₂-emissions are also analysed from a production perspective, i.e. according to where the emissions are actually generated. This is presented by the lefthand bar in Figure 1.

Firstly, one has to take into account again the direct CO₂-emissions by private households amounting to 1.9 t/cap. Here, the production-perspective considers households also as producing units. They "produce" their private services namely heating their dwellings and driving their own cars.

Secondly, the production activities by all branches constitute the biggest source of CO₂ from a production perspective. The EU production system emits about 7.2 tonnes CO₂ per capita.

Finally, the production perspective has to take into account the CO₂-emissions "embodied" in goods and services imported for intermediate and final use. These are estimated with the help of environmental input-output modelling to be at least 1.7 t/cap. The latter estimate is based on the "domestic-technology-assumption" i.e. that the imported products are produced with EU production technologies. Moreover one can state that through the import of goods and services from the rest of the world the EU has avoided 1.7 t/cap of CO₂ emissions in their own production system. Some evidence can be derived from e.g. international energy statistics that the rest of the world economy may have a more carbon-intensive production system compared to the EU. Hence, the 1.6 t/cap may be considered as a minimum estimate.

11% of EU jobs depend on exports

A typical macro-economic question answered by input-output modelling is: how many jobs depend on exports?

Labour is an important production factor input into branches. It is also a significant element of GDP, i.e. value added. The SUIOT data set shows that compensation of employees (i.e. salaries) form more than half (57%) of the total value added (see Table 3). Hence, it is interesting to analyse for which products the demand (or final use) creates most jobs and income. Figure 2 shows the top 14 products the final use of which creates most jobs and income.

Public services (including health and social) "embodies" more than one fifth of total jobs (expressed as compensation of employees). Another important creator of jobs is investment in construction (about 10% of total salaries). Using the new SUIOT data and a Leontief model, one can estimate that the exports of products outside the EU count for about 11% of job-related income.

The potential of supply, use, and input-output tables in more detail

For the first time Eurostat has compiled consolidated supply and use tables (SUTs) and derived symmetric input-output tables (IOTs) for the aggregated EU-27 and the euro area. These tables show – at a glance – the production and use of products distinguishing 59 industry branches and product groups.

Compiling SUTs is a time and resource demanding routine. National statistical institutes require more than three years to compile SUTs. The current data set includes the period 2000 to 2006 and will be soon expanded. The data set forms a powerful basis for analysis and models in macro-economics and Eurostat disseminates these data in particular for use by economic analysts, researchers, and policy advisors.

Table 2 and 3 illustrate the data contained in the SUT and IOT, for this purpose aggregated to six product groups and sectors.

The supply table shows the supply of goods and services, both domestic and imported, by product and type of supplier in basic prices (i.e. price when goods leave the factory excluding value added and other taxes on the product). The use table shows the use of goods and services by product and type of use, i.e. as intermediate consumption by industries and final use, the latter broken down into consumption by households and governments, gross capital formation and exports.

The use table also contains the income components of the value added by industry, i.e. compensation of employees, other taxes less subsidies on production, consumption of capital, and net operating surplus. Usually, use tables are provided in purchaser prices (including all taxes and the transport and trade margins needed to bring goods to the shop), but the aggregated use table in Table 2 for the EU-27 was already converted into basic prices. The SUT reflects some basic identities, such as that the total supply (domestic and imports) of each product category equals total use (intermediate use plus final use including exports minus taxes less subsidies). The SUT also allows the calculation of the GDP of the EU-27 in various ways (e.g. the sum of value added and the total final use minus imports corrected for taxes less subsidies), equalling 11.7 trillion euro in 2006.

The SUT can be transformed into a square input-output table. An industry by industry IOT shows the relations between industries – how much one industry buys from the other industries and how much it sells to other industries and for final uses. Eurostat decided to derive product by product IOTs showing which products form input into the production of another product, and conversely, for what purposes this product is used. The product by product IOT is shown in Table 3. For more information see #Data_sources_and_availability.

Shares of imports and exports in total use

We live in a globalised world. Different countries specialise in certain production processes. The SUT and IOT produced allow for a direct comparison of a number of parameters relevant for this field (also over time). Figure 3 shows the top-10 products (out of the 59 covered) in terms of import shares, i.e. the fraction of use of products covered by imports.

Not surprisingly the graph reflects that the EU is relatively poor in natural resources: product groups such as metal ores and fossil fuels dominate. But the graph also shows computers and electronics, clothing, and leather products reflecting that production of such products has moved largely to other parts of the world. For these products the EU relies heavily on production abroad.

Conversely, the EU also produces products which are mainly exported (Figure 4). The EU has particularly high exports of shipping, machinery,precision instruments, vehicles, and chemicals.

Data sources and availability

This statistical article employs various data sets which are briefly described in the following. More detailed methodological explanations are documented in a technical report which can be downloaded from the Eurostat website.

Consolidated supply, use, and input-output tables (product-by-product) at basic prices naio

Under the European system of national and regional accounts (ESA95), EU Member States transmit to Eurostat supply and use tables(SUT) (annually) and input-output tables (IOT) (5-yearly). The compilation of SUTs is very time- and resource-consuming; they are submitted only 36 months after the end of the reference period. A supply table shows the supply of goods and services by product and type of supplier at basic prices, while the use table shows the use of goods and services by product and type of use at purchaser prices. These tables transmitted by Member States formed the point of departure for a sequence of manipulations leading to a consolidated data set for the aggregated EU-27 and the euro area.

For each Member State, SUTs at basic prices were estimated with the available SUTs (in basic/purchaser prices) and (partly confidential) auxiliary valuation data. Due to confidentiality reasons the SUTs are published only for the aggregated EU-27 and euro area.

The SUTs for the individual Member States were aggregated to EU-27 and euro area SUTs. The main substeps included:

for each Member State, the use table was subdivided into an 'import use' and 'domestic use' part, and subsequently in an 'intra-EU import use table' and an 'extra-EU import use table';
each of the domestic use, intra-EU import use, and extra-EU import use tables were aggregated across countries to an EU-27 total;
a confrontation and rebalancing took place of the intra-EU import use total with the intra-EU export supply totals - which in theory should be identical apart from valuation differences, but in practice are not, due to the fact that the data are collected and reported independently by different countries and hence may be subject to statistical differences.
the relatively small intra-EU export/import differences were moved to the rest of world; the intra-EU import use and intra-EU export supply data were now identical and cancelled each other out; the aggregated EU-27 SUT now could be created by aggregating the individual country domestic SUTs and extra-EU import use and export supply tables;
the aggregated SUTs were transformed into symmetric product-by-product input-output tables (IOTs). A product-by-product IOT shows which products form input into the production of another product, and conversely, for what purposes this product is used. A product-by-product IOT, shown in Table 3, was calculated as follows from the SUTs. A transformation matrix is calculated according to market shares. This market share matrix shows the relative amount of product output by each industry. The transformation matrix is then multiplied by the use matrix to give the symmetric input-output table (product-by-product). In the transformation matrix used here, the so-called industry technology assumption was applied (see Model B, Eurostat Manual of Supply, Use and Input-Output Tables, p. 349).

The resulting data set comprises in total six tables, each for the aggregated EU-27 and the euro area. The time period covered so far ranges from 2000 to 2006 and will be extended soon. The tables come in two resolutions: 60*60 and 6*6 product groups.

Air Emissions Accounts by activity (NACE industries and households) (env_ac_ainah_r2) (Nace Rev. 2), (env_ac_ainah_r1) (Nace Rev. 1.1)

Eurostat's Environmental Accounts programme publishes regularly air emissions accounts recording emissions of greenhouse gases and air pollutants in the same format as used for SUT and IOT (i.e. in a breakdown by industries and households).

Data for eight pollutants (CO₂, N₂O, CH₄, SO_x, NO_x, NH₃, CO, NMVOC) were added to the above mentioned consolidated SUTs and IOTs for the aggregated EU-27 and euro area.

Domestic and global emissions of greenhouse gases and air pollutants induced by final use of products – results from environmental input-output analysis (env_ac_io)

The combination of all this data in the form of environmentally extended input-output tables (EE IOT) provides – as shown in this articl – a powerful analytical instrument to inform policy.

With the EU-27 EE IOT some basic modelling and analysis steps were performed, leading to the results in this article in particular creating the Leontief inverse that allowed the assessment of the environmental impacts of final consumption, etc.

Some of the environmental-economic modelling results are published. As an illustration it shows the CO₂ emissions induced by the final use of products in the EU-27 and the euro area, broken down by product groups, categories of final use, and origin of the emissions (domestic or worldwide).

Context

Supply and use tables portray production and consumption activities of national economies in a detailed manner. They form the basis for so-called input-output models and analyses. Both, the tables and the models, constitute powerful multi-purpose tools for numerous macro-economic policy questions. The analytical focus lies rather on long-term structural changes of economies (e.g. value-added shares, trade shares, cumulated value added along certain production chains etc.).

By adding environmental parameters (e.g. emissions to air or energy use) to the input-output models one extend the analytical scope. Environmentally extended input-output analyses are of particular relevance in policy areas such as sustainable production and consumption, sustainable use of natural resources, and resource efficiency.