commodities by industries, households and government associated with wage and
salary payments, profits and taxes, all for the specified time period.
Just as each industry needs the outputs from other industries as inputs to create its
own output, each industry also involves inputs from the environment, such as water
and air. Moreover, each industry yields waste products as well as the marketable
outputs that it sells to other industries and final consumers. The wastes may either be
recycled through the production process or discharged to the environment. By
considering the environment as an extra industry in the input-output model, and
by using data from the base year to approximate the environmental inputs and
outputs per unit of industrial output, the input-output model may be used to assess
the impact on the environment of the industrial activity that is required to produce a
specified pattern of final demand.
Thus, to summarise, in order for consumption to occur, industries must produce
commodities. Industrial production necessitates inputs, some being drawn from the
environment, while others are merely the outputs of other industries. Industrial
production also entails waste products. An input-output model which unequivocally
includes the environment enables estimating:
1. the industrial activity that is needed to produce the commodities people preferred
by consumers, and,
2. the impact of this activity on the environment, namely, the material taken from
and returned to it.
Notwithstanding these environmental concerns of industrial activity, the process
of consumption itself needs inputs from the environment (such as oxygen for fuel
combustion in motor engines) and entails the discharge of wastes back to the
environment (such as sulphur and nitric oxides emitted from motor engines).
These interactions may be assessed too, so that the complete model displays the
impact on the environment of production and consumption. It may be noted that the
materials balance principle says that, if during a specified time period, there is no
accumulation of material within the economy, then the mass of inputs from the
environment must equal the mass of outputs discharged as waste products.
8.9.3 Input-Output Models: Including the Environment
We can now consider how Table 8.3 can be extended to include the environment.
Table 8.4 repeats Table 8.3 but with “the environment” introduced through an
entry “environmental commodities” and “discharges to environment”. One immediate issue which crops up concerns the monetary value: the entries in the other
matrices are in money terms - e.g. a particular value of an input per unit value of
output. Since, by definition, the environment as receiver of waste has no observed
market valuation, these units cannot be extended to the matrices that include the
environment as source or destination of materials flows. Thus, it must be noted that
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8 Analysis of Environmental Impacts of Infrastructure
salary payments, profits and taxes, all for the specified time period.
Just as each industry needs the outputs from other industries as inputs to create its
own output, each industry also involves inputs from the environment, such as water
and air. Moreover, each industry yields waste products as well as the marketable
outputs that it sells to other industries and final consumers. The wastes may either be
recycled through the production process or discharged to the environment. By
considering the environment as an extra industry in the input-output model, and
by using data from the base year to approximate the environmental inputs and
outputs per unit of industrial output, the input-output model may be used to assess
the impact on the environment of the industrial activity that is required to produce a
specified pattern of final demand.
Thus, to summarise, in order for consumption to occur, industries must produce
commodities. Industrial production necessitates inputs, some being drawn from the
environment, while others are merely the outputs of other industries. Industrial
production also entails waste products. An input-output model which unequivocally
includes the environment enables estimating:
1. the industrial activity that is needed to produce the commodities people preferred
by consumers, and,
2. the impact of this activity on the environment, namely, the material taken from
and returned to it.
Notwithstanding these environmental concerns of industrial activity, the process
of consumption itself needs inputs from the environment (such as oxygen for fuel
combustion in motor engines) and entails the discharge of wastes back to the
environment (such as sulphur and nitric oxides emitted from motor engines).
These interactions may be assessed too, so that the complete model displays the
impact on the environment of production and consumption. It may be noted that the
materials balance principle says that, if during a specified time period, there is no
accumulation of material within the economy, then the mass of inputs from the
environment must equal the mass of outputs discharged as waste products.
8.9.3 Input-Output Models: Including the Environment
We can now consider how Table 8.3 can be extended to include the environment.
Table 8.4 repeats Table 8.3 but with “the environment” introduced through an
entry “environmental commodities” and “discharges to environment”. One immediate issue which crops up concerns the monetary value: the entries in the other
matrices are in money terms - e.g. a particular value of an input per unit value of
output. Since, by definition, the environment as receiver of waste has no observed
market valuation, these units cannot be extended to the matrices that include the
environment as source or destination of materials flows. Thus, it must be noted that
240
8 Analysis of Environmental Impacts of Infrastructure