CVEN4705

Environmental Sustainability – Methods, Tools, Management

Trimester 3 - 2020
National Material Accounts
OECD 2008

Lecturer:
Ademir Prata
(ademir@unsw.edu.au) Acknowledgement: Lecture contains material from previous lectures by Ruth Fisher, JP Alvarez Gaitan,
and Stephen Moore.
Overview

Economy wide – Material Flow Accounting

• Input indicators
TMR: Total Material requirements; DMI: Direct Material Inputs;
Hidden flows; Domestic and foreign components of TMR
• Indices from input indicators
• Material flow accounts for countries
• Output flow indicators
GDP and outflows; Total Domestic Output/capita; Domestic
Processed Output; Material outflow intensity; Gateway flows,
stock additions
System of Integrated Environmental and Economic Accounting
Conclusions
 Material Balance Principle

Eurostat 2000, Economy-wide material flow accounts and derived

indicators: A methodological guide
 Material Flow Accounts (MFA)
Concepts
“Material flow accounting can systematically track the physical flows of
natural resources through extraction, production, fabrication, use and
recycling, and final disposal, accounting for all losses along the way.
This technique is motivated by the desire to relate the use of natural
resources to the capacity of the environment to provide the materials
and absorb the wastes.”

Provide an overview of the physical basis of industrial economies and

derive indicators for sustainability - the total unweighted material flows
as indicators of environmental pressure/burden.

http://pdf.wri.org/resourceflows_bw.pdf ( Adriaanse et al, 1997)

 Types of Methods

• Economy-wide material flow accounts (EW-MFA)

• Material Footprints ~ Physical Input-Output Tables (PIOT)
• Material inputs per unit service (MIPS)

All methods look at the material inputs/flows into an economy, area, or process.
But there are slight differences in what they measure, how they are applied and
used.
 EW-MFA
• Economy-wide material flow accounts (EW-MFA) are a statistical
accounting framework recording material flows into and out of an
economy. (kton/year)
• They cover solid, gaseous, and liquid materials, except for bulk flows of
water and air.
• The general purpose of EW-MFA is to describe the physical interaction of
the national economy with the natural environment and the rest of the
world economy in terms of flows of materials.

It measures the exchange between the

natural environment and the economy
and – via trade – with other economic
regions.

https://ec.europa.eu/eurostat/documents/3859598/9117556/KS-GQ-18-
006-EN-N.pdf/b621b8ce-2792-47ff-9d10-067d2b8aac4b
Economy wide MFA system diagram
Eurostat (2000)

Hidden flows: natural resource use that occurs when providing those commodities that do
enter the economy
MFA system diagram:
excluding water and air
Eurostat (2000)
Global Domestic Extraction
Global Domestic Extraction
Input Indicators - Definitions
Direct Material Input (DMI): the flow of natural resource commodities
that enter the industrial economy for further processing.
Eurostat (2018)
Input Indicators - Definitions
Domestic Material Consumption (DMC): this indicator accounts all
materials that are consumed within or remain in the domestic
environment.
The quantity is the direct material input minus the exports out of the
economy (no hidden flows).

DMC = Domestic extraction + Physical imports - Physical exports

Eurostat (2018)
Input Indicators - Definitions

Hidden Material Flow : the portion of the total material requirement that
never enters the economy; the natural resource use that occurs when
providing those commodities that do enter the economy - made up of :

• Ancillary material flow : material that must be removed from the

natural environment along with the desired material, to obtain the
desired material - ores, plant biomass associated with logs, etc.

• Excavated and /or disturbed material : material moved or

disturbed to obtain a natural resource, or to create and maintain
infrastructure - overburden for ore, soil erosion in agriculture,
dredging of harbours.
Hidden flow terminology

• Hidden flows of domestic origin may be called domestic unused

extraction.
• Upstream material flows associated to imports may be called indirect
flows.
Input Indicators - Definitions
Total Material Requirement (TMR): sum of total material input and the
hidden flows, including deliberate landscape alteration; includes all
domestic and imported natural resources.

TMR comprises all resource extraction, except water and air.

Input side material categories

Each item of the material input account is disaggregated by main

materials categories:

• fossil fuels,
• metals,
• industrial minerals,
• construction minerals,
• and biomass
What can (and can’t) we find from tracking
material flows?
• TMR comprises all primary resources required for the production
side of an economy, including trade and service activities.

• Direct link between flows and environmental damage cannot be

established
(determinants include perspective of observer and
characteristics of local environment)

• Eventually input will lead to output …

TMR indicates the ‘potential’ amount of wastes and emissions

(however the time spent in stock is not known.)

Total Material Requirements (TMR)
Components of TMR
Components of TMR in Australia
TMR, DMI and HF in relation to
population and GDP
Components of DMI in Australia
 Primary energy use in Australia
Peta=1015

?
Components of Hidden Flows in
Australia

What are they?

No imports
Domestic and foreign components of TMR
Australia

Half Exports
related
 Eurostat (2018)
DMC vs GDP
DMC vs Energy consumption
Input indicators

Overall Material Intensity = TMR/GDP

Direct Input Material Intensity = DMI/GDP

➢ Constant monetary unit in each year and indexed to e.g. 1975

reference year for exchange rates)
➢ Disaggregation of aggregated data can enable this to be done by
industrial sector and region.
➢ Input end, no subtraction of exports (transits deleted).
TMR/capita and relation to DMI/capita

What does this pattern mean?

DMI=0.5 TMR

TMR=DMI
(no hidden flows)

Not possible
TMR/capita in relation to GDP/capita

What shaped line is best?

USA increasing GDP, reducing TMR

Japan greatest increase in GDP
Same starting point?
DMC/capita and Income/capita
1970- 2004

Eurostat (2018)
Drivers for DMC change

Eurostat (2018)
Why Decoupling is important
Output flows
Output flow indicators:
definitions

Domestic Processed Output (DPO): the total weight of materials,

extracted from the domestic environment and imported from other
countries, which have been used in the domestic economy, then flow
to the domestic environment.
Domestic Hidden Flows (DHF): the total weight of materials moved or
mobilized in the domestic environment in the course of providing
commodities for economic use, which do not themselves enter the
economy.
Total Domestic Output (TDO): the sum of domestic processed output
and domestic hidden flows.
Output flow indicators:
definitions
Gateways Flows: the share of DPO, or TDO, which exits the economy
by each of three environmental gateways: air, land, and water.
Sector Flows: the share of DPO, or TDO, which can directly be
attributed to the activities of individual economic sectors.
Dissipative Flows: the quantity (weight) of materials dispersed into the
environment as a deliberate, or unavoidable (with current
technology), consequence of product use (e.g., abrasion, leaching,
etc.)
Net Additions to Stock (NAS): the quantity of new construction
materials used in buildings and other infrastructure, and materials
incorporated into new durable goods.
TDO/capita

Similar to TMR; why?

Material outflow intensity, DPO/GDP

Very good efficiency improvements; but good enough?

Output indicator findings
Industrial economies are becoming more efficient in their use of materials, but
waste generation continues to increase

One half to three quarters of annual resource inputs to industrial economies are
returned to the environment as wastes within a year
11(Japan) – 25 (USA) t/capita DPO
21- 86 t/capita TDO

Outputs of some hazardous materials have been regulated and successfully

reduced or stabilized but outputs of many potentially harmful materials
continue to increase.
Output indicator findings
The extraction and use of fossil energy resources dominate output flows in
all industrial countries.
CO2 80% of material outflows (excl. water and oxygen)
atmosphere is the biggest dumping ground for industrial wastes

Physical accounts are urgently needed, because our knowledge of

resource use and waste outputs is surprisingly limited.
current monetary accounts and environmental statistics inadequate for tracking
resource flows into and out of the economy
only some resource inputs
loose information on processing and use of materials
do not count some moved materials that do not enter the economy
outputs: only wastes requiring treatment, lost information on materials in end of life
goods
 https://seea.un.org

“A first step towards the integration of sustainability into economic

management is the establishment of better measurement of the
crucial role of the environment as a source of natural capital and as
a sink for by-products generated during the production of man-made
capital and other human activities. As sustainable development
encompasses social, economic and environmental dimensions, it is
also important that national accounting procedures are not restricted to
measuring the production of goods and services that are conventionally
remunerated...A program to develop national systems of integrated
environmental and economic accounting in all countries is
proposed.”

Chapter 8, Agenda 21
 The System of Environmental-Economic
Accounting (SEEA)

• Flows of materials and energy

• Environmental economic statistics
• Stocks of natural resources

Similar to national accounts (which compares

economic activity of countries)

“The SEEA Central Framework brings together, in a

single measurement system, information on water,
minerals, energy, timber, fish, soil, land and
ecosystems, pollution and waste, etc.”

SEEA Central Framework 2012

https://seea.un.org/content/gallery
 Eurostat + SEEA

European environmental economic accounts are compiled and reported

for:
•air emissions by industry and households,
•environmental taxes,
•economy-wide material flow accounts (EW-MFA),
•environmental goods and services sector accounts (EGSS),
•environmental protection expenditure accounts (EPEA)
•and physical energy flow accounts (PEFA).

These accounts follow the international standards SEEA-CF and are

underpinned by Regulation (EU) No 691/2011, which ensures common
definitions and data quality standards.
Material Footprints
 Material Footprints - MF
• MF links the beginning of a production chain (where raw materials are
extracted from the natural environment) and its end (where a product or service
is consumed)

• Each person consumes only up to eight tons of natural resources per year
instead of today's 40 tons of resources in Germany or two to four tons demand
in Burundi, Rwanda or Bangladesh. Intragenerational Inequity

• Decoupling of GDP from DMC may not actually indicate reducing resource use
which results in offshore material extraction.
 Material Footprint - Introduction
Similar to EW-MFA, used to gauge sustainable use of
resources

Domestic material consumption (DMC) = raw materials extracted from the

domestic territory + all physical imports - all physical exports

But how to account for indirect flows ?

• 41% (29 Gt) of total global resource extraction was associated with
international trade flows in 2008

Material Footprints (MF) = DMC + indirect flows

https://wupperinst.org/en/research-groups/sustainable-production-and-consumption/
 Raw Material Consumption – Another term for MF

• The raw material consumption (RMC) indicator complements the established indicator
of domestic material consumption (DMC) derived from economy-wide material flow
accounts.

RMC = Domestic extraction + Imports in RME - Exports in RME

• Eurostat provides a country RME tool for National Statistical Institutes (NSIs) to produce
country-specific RMC estimates.

• Eurostat continues to publish annual estimates of air emission footprints and material flow
accounts in raw material equivalents (RME) for the EU.

MF

http://www.m
aterialflows.
net/methods/
Raw Material Consumption – Another term for MF

Eurostat (2018)
Material footprint and resource productivity
1990 1995 2000 2005 2010
0.6
0.5
0.4
0.3
0.2
0.1
0.0
-0.1
OECD
MF GDP DMC

Wiedmann, T. O., Schandl, H., Lenzen, M., Moran, D., Suh, S., West, J., & Kanemoto, K. (2015). The material footprint of
nations. Proceedings of the National Academy of Sciences, 112(20), 6271-6276.
http://www.pnas.org/content/112/20/6271.short
Changes in total resource use MF vs DMC
How can we calculate it?
Some different approaches – similar to CF
Input-output is increasingly used due to flexibility and ability to deal with
large datasets.
 Material Footprints can track material usage

“The material footprint reallocates the

amount of materials effectively extracted
to the countries which actually consume
those materials”

https://theconversation.com/have-we-hit-peak-stuff-55728
Apparent Lightness for Heavy Impacts
Material Inputs per
unit Service (MIPS)
MIPS terminology
Material Inputs
𝑀𝐼 (total mass based again!)
𝑀𝐼𝑃𝑆 =
𝑆 Service
(e.g., units of service delivered by
product during its lifetime)

MI = ER + PW
Ecological Rucksack
(lets open the bag and see
what is inside…) Product weight

Or could be called eco-intensity

Related to Resource productivity = S / MI

Ecological Rucksack … aka Backpack

Very similar concept to TMR and MF at a national level – however

different inclusions and scales.
Indicators
I. Abiotic (i.e. non-renewable) raw materials
Mineral raw materials, non-saleable production , fossil fuels , excavation
II. Biotic (i.e. renewable) raw materials
Plant biomass from cultivation, biomass from wild harvest
III. Soil (agriculture and forestry)
All soil moved at the earth’s surface
IV. Water
e.g: surface water; groundwater
V. Air
e.g: air for combustion; air as raw material for chemical/physical transformations
Scope and purpose
All material inputs to produce energy

Energy
All material
inputs over
lifespan

Service

Natural resource equivalent of COPS (costs per unit service)

 MIPS Definition: (Material Inputs Per Service)
MIPS = (weighted) cradle to grave material inputs per unit of service obtained
from a good

“proportional” to environmental impact potential

e.g. 1000 “equivalent” kg materials to provide 10 services from a good “A”

→ 100 kg/service from good A : better
→ 200 kg/service from good B : worse

must be equivalent service (e.g. printing 1000 pages of text)

Difficulties here: e.g. transport

Weighted: propose to differentiate between soil/overburden movement and

incorporation of toxic heavy metals in the good. Initially by expert opinion
…not yet done
Material intensities / characterisation factors.
Published by Wuppertal Institute (https://wupperinst.org/en/);
Could also use from LCA analyses.
Material Intensities of food products
 Potential Application / Advantages
• Mass and energy in same units, (weighted) kg
• A preliminary LCA tool
✓ Quick, cheap, screening.
✓ Prelim. risk assess. built in to weights.. if they are used.

• A planning tool/index
✓ MIPS is ok for comparing simple product choices, e.g., cardboard vs
metal container.
✓ MIPS is not yet suited to complex electronic products which have long
supply chains involved.

• Disadvantages?
Critique
What MIPS cannot do…
1) Does not account for specific "surface-use" for
industrial or agricultural and forestry activities.

2) Does not take into account the specific environmental

toxicity of material flows.

3) Problem of non-differentiation between material types.

4) No direct reference to biodiversity.

5) Problem of availability of data (still only via Wuppertal

Institute).
Final Considerations
Which method is best?
Depends on your research question….
Each method uses different measures – think about which is most
appropriate for your application.
Still super confused? - Write a glossary of terms!

Need physical accounts to design and monitor comprehensive policies.

Conclusions
In order to achieve the basic aims of sustainability:
• resource conservation
• protection of the environment
And to avoid a crisis in the future related to excessive flows of materials
through our economies, we need to efficiently and effectively slow
down material flows.

Front end of materials cycle is important

→ causes future environmental carrying
capacity problems as stocks become
wastes - focus environmental control
attention here as well.
Conclusions
This requires:
• a metric for material accounting
• a material flow model
• provision of material flow information related to our economic
processes
• the use of this information to develop policies and detailed action on
many fronts to provide services with dematerialized goods