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3, MARCH 1975
Input-Output Models in Economic and Environmental Policy Analyses
A b m c t - T h i s paper discussesthe use of input4utput models for the a n a l y s e s of economic growthand resulting environmental, resource aud
TABLE I PROJECTIONSOF INDUSTRIAL POLLUTION AIR
Generation forSelectedSectom,UnitedStat( n t i l o u u n d . of tons) i 1970 to 1980
related iswreg The emphasis is o n discussion of a general structure and Characteristics of the input-output models and on their for policy uses analysis. A luge number o f such analyses can be undedaken using input-output models. These include analysis f pollution generationby o 8ource for any specified time period, study ofpollutiongeneration
trends under a number of economic assumptions, comparison of alternative pollution abatement costs, determination of the environmental and economic effects of dtemative raw m a h i d inputs, andysis of economic and environmental impacts resulting from alternate output and/or end-product specifications, and others.
Part. Indrutq 246. corl mning
s o ,
0. 0 .
Alrborne Pollutauta BC co
2086. 1U4. 151.
483. 283. 1692.
0. 0. 0. 0.
INTRODUCTION HIS PAPER discusses the use of modified input-output models for the analyses of economic growth and resulting environmental and related issues. In a very general term, this paper sets forth the scope of the effort carried out
ChedCd. Paint Petrolem refining S t m e m d clay Imo m d a t e e l
1045. 2599. 2336. 257. 775.
under a research contract with the United Nations on the“Impact of Prospective Environmental Issues and Policies on the International Development Strategy.”’ However, the emphasis here is on discussion of a general structure and characteristics of the modified input4utput models and on (with specific examples where possible) their uses for policy analysis, (see for example [ 1 ] -[ 31 ).
USE OF THE
6501. 646. 29163.
= h t r . t M
INPUT-OUTPUT POLICY ANALYSES
A number of important policy studies have been undertaken by using either an input-output model modified for environmental analyses or by grafting onto the basic model additional economic analyses. These are discussed in this paper.
Trends in Residual Emissions The model readily calculates the quantity of pollutants generated and emitted into the environment by industry sources for any specified time period. Partial summaries of pollutants generated and/or emitted for selected economic sectors and/or type of pollutants can be derived. Table I, for example, sets of in forth projections industrial air pollution the United States for the 1970 to 1980 period [ 2 ] . Furthermore, the model can be used to measure pollution generation trends under number a of economic assumptions (e.g., rate of GNP growth, changes in population, changing weights of final demand sectors, etc.) as shown in Table I1 [5I . Thus the model allows for a readily available examination of alternative economic assumptions.
Manuscript received June 7, 1974;revised October 16, 1974. The author is withtheNationalPlanningAssociation,Washington,
TABLE 11 RESIDUAL EMISSIONS UNDERVARIOUSPOPULATION AND ECONOMIC GROWTH ASSUMPTIONS [S]
Continuation of the 1970 Percentages of Pollution Abatement by Each Industry and Sector in the United States is Assumed. 1970 and 2000. (wastes in billion of pounds)
w u tU
E . &
ubrm WUtea rer
56 196 122
49 171 100 366
w Oddu of
sulfur 132 li-m
85 231 389 58
cubon WDaodde 467
208 ll57 587 1129 542 31 10
198 ll2O 501 25 9
161 14 7
D i u o l d Solids l l t r n ~
A a -
of curreat poplktion trend# m d h y h pr&tlvity:
ta s d rd
The United Nations study is being coordinated by the Centre for Development Planning, Projections and Policies of the Department of Economic and Social Affairs in cooperation with other offices and orand with other bodies. The ganizations of the United Nations family study, as a whole,w l consist of a reportby the Secretary General and l i a technical report.
2 A 1 m -
laa p o a l t h
hg. CmtiDfYtion of c m m t papulation trand. m d h
lams poplktion trmd. d lower productivity.
Fromthestandard inverted input-output matrix equation. The pointZ = 1 represents thelevel of waste discharge with no treatment atall. 19 0 6 4 Pesticides md lartilizera BdoL. 3 illustrates the costs namely A m .432 PROCEEDINGS OF THE IEEE. it is Economic Impact of Increasing Pollutant Control The cost of marginal unit of pollutant increases rapidly with the proportion of residuals removed. 4. The minimum in income for othersectors. 2. Mine. A z 2 . as is shown in Table I11 .:ul treatmentPf=A.) as Any shift in c o s t s w tend to have an effect on prices. the rows of interindustry coefficients corresponding to the residuals treatment sector(s). we can write a general expression for the “new” price vector p f : Impact onPrices p f = [l + A. the residual treatment sector requires some labor and. (5) input-output matrix as follows: + I I I I I 7 I where The raw materials and manufactured goods price indices require no explanation. and A z o . The rapid increase in c o s t s as we approach the Zero effluent reflects the phenomenon of decreasing returns. the leastcost operating Since manyindustriesareaffected. 3. Consider two cases. =A. the impact of regulatory policies may be assumed. in principle. and Y1 X are clear and straightforward. Fig. the columns proportion. In the first case.A . resulting from residuals management activities. Total c o s t s to industry attributable to pollution now consist of interindustrycoefficientscorresponding to the residuals control sector($. we obtain in structure. like other sectors. A 1 2 . However. as shown schematically in Fig.. other things to equal.discharge doubles (up to its maximum) the tax paid rises in dustry must bear to control residuals. Fig. 1 [71. 5. be determined for each pollutant in each industry-or one curve may be assumed across theboard. has a characteristic value added by labor. Solving for p . as greater and greater effort can.” thus Pz can be interpreted as thecost of treatment to thelevel such as that of the gross residual output x2 only an amount y z is Impact of “Effluent Tax” actually discharged to the environment.:A12NA21] P1 + A . Thus direct and indirect costs of achieving a given reduction in residuals discharge for the economy as a whole may be computed. or set of curves. Agricultural 7. all of these terms vanish. Similarly. so that as the level of In more ordinary language. the following equations hold : p 1 = A . therefore. these are just the c o s t s which in. for simplicity. Combining the natural resource sectors with the ordinary production sectors. Simple linear l vices to other sectors. . The easiest way to compute the overall effectis to observe that. 2. The c o s t s of residuals reduction p2 can be parametrized with respect to the fraction of pollutant(s)eliminated. Sector Galeratad Sugar k t .. or to the pollution control sector itself. prices will be different-and high-in the first case (treatment) than in the second case (no treatment). poultry and Eggs k t Products 1268 1135 817 4. I . shows how by the residual treatment sector from the other sectors. UNITED STATES 1970 [61 ( i l o pounds of EJ m e r a t e d per d mli n sD o output) i n mu BmL 1. Other intermediate goods and services will also rise. A 1 2 . Given sucha curve.and l i o p t o c k Rodruta. ~ A ~ ~ P ~ . Notice that each viously the costs of pollution treatment for some sectors result curve has a minimum point. whereas in the second case. higher and higher taxes are imposed. although the productX 2 = P ~ X represents the dollar “output” of the pollution control “industry. with and without residuals treatment activities. up to a point.U? .:ul (2) 12 3 up) treatment no +Ai:A12NA21Ai:Ul +A. functions are presumed for simplicity. 6. namelyA m . In fact. 10. (Ob. Thus. let us modify the standard p. we can compute the equilibrium price vector in each case. be explored using this framework.MARCH 1975 TABLE 111 RANKING O F SECrORS OF ECONOMY GENERATINGTHE TEN HIGHEST BOD COEFFICIENTS. 834 823 190 miry Paper Farm Rodnet. A z.A z z represent “sales of pollution controlser. 8. we have a value added vector with a nonzero element (u2) and nonzero matrix elements A m . as shown in Fig. : A l z N ~2 (4) Equations within an input-output model are also provided to balance the system in value terms and compute shifts the price in terms of the old price vector p 1 . Let 1 be the “level” of pollution remaining after treatment.imposed on industry by two different tax rates. Producct. The impact of a hypothetical “effluent tax” penalty also can In its usual dimensionless form. but l i direct cost of residuals control services is not the whole story. PZ is not a price in Z the ordinary sense.:AlzNuz (3) It is also possible to determine and rank the direct as well as the indirect pollution generation coefficients from various sectors of economy. lk. so the interpretation of XO. A z l . where N is the determinant of matrix A 1 1 .this would vary with the levelof control. To immediately illustrate how this procedure works. A n represent “purchases” of the sum of control costs plus tax payable. Aaiula. The may be quite sensitive to the tax rate. the c o s t s of purchased point does not shift proportionately to the left. 9. . Generally speaking. Paperborrd k u h n lriiyproducct. by definition. which is presumably where industry would choose operate.
Forexample. pelletizing results in fewer wastes. Among the determinants of pollutants and produces superior iron. Iron is produced by either the sinterquirements of production (technology). and less process waste water.5 Resid& Faced with increasingly stringent residual control standards. seem to be very important. Input. United States. it is important to realize that pelletizing generates less the very generation of residuals.and Output Alternatives A more complex example of the impact of alternative techInput-output models can also be used with additional analy. EQD P d Percent a D Fig. for the cost curve shown in Fig. caustic soda production does away withmercury residuals entirely [ 8 1 . 1. letizing technology has increased rapidly since its introduction in the early 1950's and by 1985is expected to be the dominant Technology Alternatives process.production of iron [ 9 ] . Leprl . as shown in Fig. In these situations. 1945-1985 [ 11. The use of pelalternatives. 1. 4 . Combinations of treatment and taxation. A1Or. 3. Typical treatment cost curve. -1 I 0. thegeneration of residuals. 2.nologies on industrial pollution abatement costs can be seen in sis t o study the impact on pollution generation or resource re. When estimating pollution generation in the steel inTechnological changes in production processes can influence dustry. input output and ing or pelletizing method. Agglomerated iron ore consumption as percent of total agglomI I I- erate by designated type. particles.d c 4 Qt 5 l$* 4 4 Fig. some industries cannot use endaf-the-line abatement because of technological or cost factors. while a 90-percent reduction would * production process of caustic soda results in significant generarequire us to increase the tax rateby a factor of roughly 15 : 1 tion of mercury wastes. all of which reduce the pollution Fig. the newer diaphragm technology for as compared to A . Possible effluent tax schedules.theoldermercury cell 50 percent (to I = O S ) . Incremental cost (includes annuahation capital and 0 & M costs. productiontechnology changes Consequently. 6-percent rate 20 years) of removing biological oxygen demand (BOD) malt plant annual capacity 3 000 000 bushels of barley steeped [81* Trea-t Cost s 10 I l / l I I I I 1955 1950 1945 1985 1980 1975 1910 1965 1960 Fig. 5 . many inclear that. Production.GUTMANIS: INPUT-OUTPUT MODELS T U Cost Cents per 1 433 s 1000 Gallons of WtRnter Treated Fig. 5. 4 a tax such as A dustries have developed production technologies which prowill achieve a net reduction in pollution discharges of about ducefewer residuals.
sulfur dioxide. Between 65 and 85 percent of steelconsumption is ultimately recoverable as scrap. to perhaps 25 percent of the total industry capacity.0 163. To develop policies for residuals control in the tissue paper industry.However. Two additional examples of significant impact on pollution generation resulting from alternate technologies can be seen in the pulp and paper manufacturing industry [ 101. Fig. the sulfite process is preferable. The electric furnace process utilizes 98percent scrap input. reduces the more in common waterborne residuals (and. States.since waterborne residuals andwaste-water controlcostsare significantly lower. United 1945-1985 [ I ] . Moreover. However. This example illustrates well the difficulties associated with designing nationalpollution control policies.O S u l f i d u and hydrosen Particulates 26 . Steelproduction as percent of totalproduction by designated process.6 26 .0 118. it results in large reductions in the generation of solid wastes. Even as scrap consumption declines. PROCEEDINGS OF THE IEEE. States. and the waste-water load. a broad'residuals management viewpoint must be taken. compared t o 29 percent for the basic oxygen process. shows the open-hearth process declining as the newer basic oxygen method has been introhas beena decline in demandfor duced. Table IV. total scrap input t o steel furnaces has declined from 48 percent in 1947-1953 to 43 percent in the 1964-1968 period. 6. but also the benefits and costs of various types of control for various types of residuals and various environmental media. 7. 1 5 F g 6.434 1007. it appears that the steel industry's capacity for scrap usewill continue to erode slowly as the open-hearth method declines further. 7. The net result of rising supply and declining recycling capacity means that unless the trend is reversed by public policy. one must not only calculate the costs and benefits associated with various types of control of one type of residual and one environmental medium. which are difficult and costly see to treat [ 101.0 solved solids (DS). ao e r r bm 1 Chlorine . a markedly lower percentage of future scrap will be utilized. from a strict air pollution management point of view. While electricfurnacesare. Unfortunately. The graph of relative shares of steel production by technologies in the United States. it increases particulates. results in lower treatment costs) albeit at a cost of generating other residuals.in essence.Fig. the use of the sulfate or kraft process of producing wood pulp. projecting ahead t o 1985. From astrict waste-water management point of view. The impact of alternative technologies on the resource requirements as well as on pollution generation can be seen in the alternatives of steel production. the available supply of scrapshould rise.Oneconsequence scrap vis-$-vis virgin ore. Moreover. scrap melting furnaces.0 113. and the scrap component of solid wastes will grow. and creates odorous sulfides and chlorine gas. great potential pollution abatement benefits will fail to be realized.0 507. The open-hearthfurnacepresently consumes 42-percent scrap. future scrap availability canbe expected to increase. therefore. their share of production is expected to increase only moderately.0 0 28. 70. abatement costs associated with given levels of steel production. As steel production rose rapidly in the past 20 years. the relative shares of the three processes. so that present scrap supply reflects steel output one to three decades ago. because of the technological substitution noted. The kraft processbrings a major reduction of waterborne dis- TABLE IV POLLUTANTS FROMTHE KRAFT AND MAGNEFITE (SULFITE) PROCESES I N TISSUEPAPERPRODUCTION [lo] ( n ernmda per i tn o of tu-) Sulfite TEC~DO~OQ midrul.8 5. Since one cannot escape the laws of conservation of energy and mass. but actual scrap recovery in 1967 was only 43 percent. Here is an example of industrial technology changes running counter to environmental goals.O 62. The production of paper provides another example of the effect that different production technology canhave on the . i.5 Solid W .1 w c aud h r g a a i c =lid. MARCH 1975 1 1 I 1r m t 1 1 I a 20 I I hlflt. Steel products have an average life of about 20 years.t u 93. I I I ! I I I I I I I I I I I I 10 10 k Wood pulpproduction a8 percent of total wood pulpproduction by designated United process. 1945-1985 [ 1 1 . In the case of wood pulp production. which increasingly dominates the sulfite and other methods as shown Fig. the kraft technology is preferable to thesulfite process. 1 Sulfur dioxide Kraft TeckawlogL 1.
88 Total. with considerably reduced residual water loads. The dry-forming process uses wood pulp but does not require water as a carrier and therefore eliminates the need for large quantities of water that are required for the wet-forming process. In the production of plastic materials and polyvinyl chloride (PVC) resins. ud . ma c u of m y Hconhry .12 0. of particulate per ton of t i r a u e paper. peach nectar. butalso needs to recognize the potential for changes in the pertinent technologies over time in order to estimate futureabatement costs consistent withproduction technologies which will then be possible [ 121 . Sltcn P. O p c r a t h 350 d v a per ~ u w ru 4 . Similar to the assessment of entire production technologies.increasing conformity of fruits (inputs) in size and ripeness has substantially decreased wastage.EVKL 01 DISCBARGE SUKMBDS I I1 111 rrp. Comprehensive estimates of industrialwaterborne residual 3. .83 0. et# per t of tm w paper. has reduced fruit wastage by approximately 40 percent over the last 30 years [ 131.76 0. The costs . Furthermore. Alternatives in End Products e o d u c e d The characteristics of end products also have a substantial effect on residuals generation and on the costs of their control. for example.C. of particulate . The result has been substantial decreases in BOD and SS per ton of raw material processed. Because there is a relatively wide latitude for selectivity. In food manufacturing. TABLE V NET RESIDUALSMANAGEMENT COSTS PER TON O F INTEGRATED OUTPUT.16 Sfton Liquid remiddm wdification. and to evaluate alternatives for that particular activity which will generate fewer residuals or result in reduced pollution abatement costs.80 0.38 5. m i a ? 5. However. credited with c d n hd p r i m . can be obtained from dry caustic or cryogenic peeling. Due to the greater degree of pulp bleaching required for high brightness paper.33 0.. of particulate The best example of this can be seen in the changing use of fuels brought aboutbythecurrent energy problem. 4 lbm. reduces residual water flows and BOD and DS.33 1 .61 control costs must take into account the effects which may be realized bythe use of alternative production technologies. peach concentrate. Therefore. $1- m u : 1 &mu are i 1970 dollarm and are baaed on amtintea of operatingIrbor. An example of the opposite trend. 4. a shift from water conveying to dry conveying suction systems. Since the use of each of these (or similar) production subprocesses will result in a reduction in water pollution control costs.38 8. these new subprocesses do tend to be more energy intensive. 4 LEVU I1 W ae a particulate dimcharge of 8 lbm. e p 12.06 n 31: Mluched Tissue Paper L. projected future abatement costs must also reflect the future use of such alternatives. and minimizing specific waste control expenditures. n & a labor and ~ppliaa. The improved size uniformity of harvested pineapples. By comparison. without bleaching. i . which results in increasing reliance on coal in place of gas and/or oil. the color of the kraft process pulp. dryforming process can eliminate or considerably reduce the high costs of treating the large volume of process waste water used in the wet-forming process.GUTMANIS: INPUT-OUTPUT MODELS 435 generation of residuals and residuals control costs [ 111.55 1. em-tissue in a brown color.09 0.33 0. including pastelalored products. In the canned andfrozenfoods industry. any effort to project industrial water pollution abatement costs must not only take into account the current availability of alternate production technologies. the generation of dissolved solids is double from what it would be if tissue was not colored. KRAFT MILL PRODUCING 5 0 0 TON PER DAY OF TISSUEPAPER [I41 Bleached Tisme Paper LEVEL OF DISCEABGE S U H M B D S P. S f t m 0. In fruit-processing operations. For white and pastelalored tissues. theyield per case has risen from 40 cases per ton of peaches to over 5 5 cases in the last 20 years. Slton T o t a l . disposal.similar results. Several examples illustrate the possibilities for such reduction. and DS.C. and pww m ra wdifiution c a t s . Currently. where changes in the end products result in increased residual loads and control costs. Examples of changes in the materials used which adversely affect the environment in general and water pollution control costs in particular can be found in many studies of mineral supply and availability. and. Alternatives in the Materials and Fuels The type and especially the quality of material inputs used in production often have a pronounced effect on the quantity of residuals generated and therefore residual treatment costs.38 0.66 6.51 d chum m rtivted up n o 8 i at c v ru mid nrbt l m a a e m t . and blanching with hot air instead of steamor hot water.10 0.72 0. A careful evaluation of tradeoffs and benefits and costs must be conducted if rational policies are to be made. The differences in the net residuals cost associated with bleached and unbleached tissue paper have been calculated and are displayed in Table V. 3.19 0. As a result. m r and material requir-u. T i 4: gpc of Tru-tlJ I Gueoua r e dm u afli u t i o a . e . L3VU I i n d i u t e a a particulate discharge of 30 lba.l i d remiduals gmerated in liquid a d o m guacam r u i U m d i f i u t i m . the residuals generated are greater.Eco-tissuemayalso be produced entirely from waste paper. of TrUtmtlJ Guwm Wid& w d i f i u t i o n . suspended solids (SS). Sfton Solid r i u l ud am djspul. ddi I1 0. there has been a trend toward an increasing number and variety of end products.46 0. w 2. subprocess changes can be directed specifically toward easing specific pollution loads. theonly peach product that was canned was halved peaches: Today peach products also include peach pie pieces. generates only 10 percent as much dissolvedsolids. with a corresponding decrease in control costs for this part of the industry [ 131 . Sltm Liquid m i d & w d i f i u t i o n . switching to the bulk method of producing PVC resin can considerably reduce waste water-BOD.59 111 1. and peach irregulars. These reports project a considerable decline in the quality of ores to be used which will increase residuals generated per unit of ore processed as well as the costs of pollution abatement. for example.40 0. estimation pollution control costsmust of include such alternatives for production subprocesses. are indudad in the liquid 3. it is also possible to identify residual generating subprocesses. LEVU I11 indicates a particulate&chargeof per ton of timaw? paper.the . as in the case of changing technologies. . mludm. Two decades ago.eitherthedominant wet-forming process or thedryforming process canbeused in production.07 Sltcn Solid rasimul. can be illustrated by the trend toward paper productswith higher brightness.
This is essentially a matter of bookkeeping and computer programming and need not be discussed here. The latter should. will rise to 60-70 percent in 1985. The third logical step is to project the future time-history of the substitution process. %. Bleaching is now usedin over 50 percent of the wood pulp industry and assuming continuation of present trends.436 PROCEEDINGS OF THE IEEE.45 14. + ajl -'constant) All e l m t s in ith r w increase All elements in jth r w decrease (ah + constant for a l l ) I md I1 Output of ithsecto as input to sector Synthetic for rubber in tires.77 TO t A l 45. listed in accordance with their effect on the input-output matrix. It is important to keep in mind that substitutions of types I. ab. changes in the characteristic pattern of sales outputs from each industry others). to Within this relatively narrow context.* decreases (a. within the input-output model. Air trapaport replacing Output of I* sector as input to all other sectom Output of I* sector a0 input to m sector a Output of ithm e c tor M input to all other sectors - I11 Output of j*. = conatant f o r all) . Furthermore it can provide such estimates under a number of assumptions such as the scale of waste treatment plants. + a + . This forecasting step involves a separate model of technological diffusion which requires explicit detailed justification. tm&.45 Solid Waste 18.05 mity with the projections.decreaeecl (a. as indicated in Table VI which follows.. - constant for'all o of residuals discharge control are roughly five times ashigh for the bleached tissue paper. equivalently.61 5.reflecting the fact that substitutions tend to occur at quite different rates in different industries.. involve separate consideration of each elementalong a row or column. All suchsubstitutions can be successfully incorporated in the input-output model. whereas types 11. shown in Table VII. r w a decrease . . sector inputs and outputs and ratios. 1970-2000 [ I S ] ( b i l l i o e of 1970 $) P0Uut. MARCH 1975 TYPES SUBSTITUTION OF Type TABLE VI -le Substitutor Substitutee Output of j sec" tor an input to nth sector O t u of jth s e e up t tor M input to all other sectors Effect on 1-0 IlatrFxElements Elernt a h increasea El-t a. plastic for steel in auto industry Use of telephone replacing use of postal eelvice Plastic in building industry replacing plywd r e a l ..= + .etc.43 PelTaIt of 2. Allof the alternatives discussed above cause shiftsin the interindustry coefficients. Cost estimation.. o plater. + aw constant) .sectors as inputs to all other sectom Labor U I rdl. The fourth and final step is to modify the existing input4utput coefficients in confor- TABLE VI1 SUMMARY OF POLLUTION ABATEMENT O T S IN THE C UNITEDSTATES. including general interdepen- . . Finally it can estimate treatment costs under specified alternatives of production technologies. that is to say. it is possible to define all relevant interindustry technologicalchanges as substitutions of one purchased input (including labor) for another.u) 21. for example.97 m 2. our approach is first to identify a number of specific technological trends which can be expressed as substitutions.00 37. -!- Output of iths e c tor ae input to sector sector Ith input to Uachluery replacing labor for agriculture Elacnt % increasea Outprt of it" s a c A I other input. Substitutions may be of several basic types.66 Waterborne 19. kth.nt2000 Airborne 1980 1970 0. . in principle. and to estimate historical rates of change of the variables. l r. The next logical step is to translate such trends into terms used in the input-output model.. However. o.91 2. A ( + a. r I&.82 10.e. and VI involve wholesale changes to entire rows or columns. Elenent a b increases Elclent a . changes in the characteristic pattern of sources of purchased inputs to each industry from others (or. i. . We are thus concerned with changes which are reflected in altered interindustry relationships. In general terms. which sets forth projected pollution abatement costs for theUnited States for the 1970 to 2000 period. CONCLUSIONS Input-output modelscontainmorestructuralinformation than most other models and satisfy a number of essential conservation laws and identities. Pollution Abatement Cost Estimates The model can estimate pollution abatement costs for any given sector of economy andspecified level of residual removal for any time period required. a h .?- I V Output of I*. fitting one of the classifications in Table VI. This is straightforward inprinciple. . and the type of treatment processes used. this has beenundertakenin the past and does not present undue methodological problems. ship All elaents in I* LW increase Al e l e r n t s in j*. noris it feasible t o indicate in thisbrief paper the detailed methodologies whichare used to incorporate these alternatives of production technologies inputs and end-products into an input-output model. and V result in changing only one or two (or a few) matrix elements.. I tor a input to m to all other mecall other eectom tom (mince labor C M be replaced m t for uimle ecmm) :Ia .18 8.. . but complicated and tricky in practice. IV. creating higher pollutant loads and resulting in much higher abatement costs [ 141. 111.24 1.00 77. a I . . I a I*. inputsandoutputs. were obtained using an inputoutput [ 15 I .sectors as inplts to I* sector la. t i l e .
“Economic costs associated with the environmental qualityalternatives in the United States. with relative direct and indirect effluent cost and price consequences for various sectors calculated and compared. Man. D.” ChemicalWeek.. Policies consequences of assumedpoliciescanbe as regards particular residuals-e. Sept. 1971 (prepared the for Commission on Population Growth and the American Future). While input-output models implicitly assume static productiontechnology. [ 12 ] I. The major advantage of the modified input-output models from the standpoint of environmental analysis is their ability to deal with economic consequences of policy changes implemented at the sectoral level.GUTMANIS: INPUT-OUTPUT MODELS 437 dency. D. Residuals and residuals treatment can be incorporated explicitly both in physical and in economic (cost/price) terms.” Natural Resources J .” IEEE Trans. 1971.. ’Herzog and‘R. 1972.. Ayres. output limitations (rationing). Annapolis. G. Corp. Lof. Inc. cost minimizing and regulatory strategies are also difficult to analyze. Washington. sulfur dioxide-can also be tested across the board. Both direct and indirect price and waste discharge computed. 1973. Bower.. Water. vol. Chicago.. however. Environmental ImplicationsofTechnologicalandEconomic Change for theUnited States. D. Hearson.: National Planning Association. Gutmanis. Md.” a paper presented t o Universities-National Bureau Committee for Economic Research and Resources for the Future. SMC-3.. G. 5-7. Gutmanis. Ayres and I. in industry. [ 1 5 ) H. . Cybem.C. forthcoming. for instance. 23. Gutmanis. Man. Ford and W. Syst. 1975.: Government Printing Office.” Washington. 1967-2000: Znpur-Output An Analysis. “Methodology: The model. relocation.or even subsidies. Man. methodology and empirical results. recycling. Geneva.” presented at the 5th Int. U. Res. vol. prepared for the Environmental Directorate of the Organization for Economic Cooperation and Development by the International Research and TechnologyCorporation. deterministictechnological projections can be exogenously incorporated. T. while others occur because of artificial constraints on substitution between sectors. 10-1 1. L. [ 4 ] D. Inc. and W. 1972 (prepared for the Interagency Economic Growth Project).C. U. Washington.C.. H. D. The major weakness is their inability to deal with transient effectssuch as short-term relationships between investment of environmental and unutilized capacity.. “Residuals management in the pulp and paper industry. NOV. 1973.g. Nov. In general.)cannot be reflected in the model without additional analytical effort. Ill. Washington. Shapanka. processshange. D. and Technol. Gutmanis and A. 0. 4.Aug. The Generation and Costs of Air. and Technol.: Int. “Input-output economic analysis of environmental impact. [ 1 1 1 “Drypaperprocesshaseconomicbenefits. Gutmanis. [ 101 B.) I. 1972. EnvironmentalPolicy:AFramework for Analysis. 1973. Gutmanis. T. and A. 191 R. Trans. product change. I. Input-Output Tech. “Air pollution and economic structure:  [ 61   Empirical results of input-output computations. Environmental policies that can be tested at the industry level include waste discharge limitations (standards).Control o f Mercury Pollution: Some Economic Considera. pollution and treatment cost coefficients.” i Resource n and Environmental Consequences of Population Growth in the United States. 141 B. modified input-output models are highly useful tools for undertaking environmental policy analyses.: Int. cost increases for residuals treatmentor as penalties (effluenttaxes). on Cost-Benefit Analysis and Water Pollution Policy. tions. Washington. etc. Bower. no.. Syst. They explicitly reflect industry disaggregation. Ridker. alternative strategies available to industry (including. 37. Cybem.C. 131 S. Hanke and I. but not k i t e d to. and Solid Waste Pollution:1970-2000. p. G. [ 31 K. I... Conf.” a paper prepared for EPA Conf.” in Resources and Environmental Consequences of Population Growth in the United Srates. Jan.C. the In context analysis. Ayres and REFERENCES [ l ] R. though some spurious effects nevertheless result from excessive aggregation of different producers and commodities within sectors. Res.. Chen. 1971 (prepared for the Resources for the Future. [ 2 ] IEEE Trans. Nov. Ridker. and 1985: An input-output analysis. Washington. “Methodology: Technological change. Gutmanis. Syst.” IEEE Nov.N.C. Ed. Leontief.. “Environmental implications of economic growth in the United States.: Government Printing Office. 1 1 . Shapanka. “Estimates of industrial waterborne waste control costs: A review of concepts.. R.1970. “Studiesof residualmanagement 1971. 1970-2000: An input-output analysis. 1971. 1980. Corp. vol. 1973. SMC-3. I. 1973 (prepared for the Brookings Institution). Cybem. D. .
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