proportional to industrial output. With such assumptions, the extended input-output
model can be operated to handle questions such as “what influence would a change
in final demand have on industrial activity and hence on demands for environmental
commodities and on the quantities and kinds of waste discharged?”
8.9.4 Leontief’s Extended Input-Output Tables
Professor Wassily Leontief has extended input-output tables, which he originated, to
include a pollution abatement sector. This is a significant departure since pollution
abatement is itself an industry needing inputs from other industries. It is also
necessary to estimate pollution coefficients, relating tonnes of pollutant to some
unit of value of industrial output. The model considers air pollution only. No flow
from the environment to industry is incorporated so that, like most of the other
models, the principle of materials balance is not included in the model. Victor’s
(1972) models provide the exception to this general rule.
Table 8.5 shows the general structure of Leontief’s extended model.
Thus, matrix A is the traditional input-output matrix relating inputs to outputs,
consisting of elements a ij .
Matrix B relates industrial inputs to pollution elimination activities.
Matrix C relates pollution emissions to industrial outputs, so that the components
here are the pollution coefficients.
Matrix D relates antipollution activities to pollution, so that the elements indicate
how much pollution reduction takes place as a result of antipollution activity.
By operating the model, Leontief is able to estimate the impact on the level of
emissions in individual industries of specific levels of final demand. At the aggregate
level, the model allows estimating the total level of pollution that will arise for a
specified projected level of final demand. The model can also assess the price effects
of specific antipollution measures, a feature of input-output which seems desirable
from the government’s perspective.
8.9.5 Limitations of Input-Output Models
Although the extension of an I-O analysis to environmental phenomena seems to be
straightforward, it leaves several problems unsolved. Some these are due to inherent
Table 8.5 Leontief’s
extended model
Industry outputs Anti-pollution activities
Industry inputs
A
B
Pollution outputs C
D
242
8 Analysis of Environmental Impacts of Infrastructure
model can be operated to handle questions such as “what influence would a change
in final demand have on industrial activity and hence on demands for environmental
commodities and on the quantities and kinds of waste discharged?”
8.9.4 Leontief’s Extended Input-Output Tables
Professor Wassily Leontief has extended input-output tables, which he originated, to
include a pollution abatement sector. This is a significant departure since pollution
abatement is itself an industry needing inputs from other industries. It is also
necessary to estimate pollution coefficients, relating tonnes of pollutant to some
unit of value of industrial output. The model considers air pollution only. No flow
from the environment to industry is incorporated so that, like most of the other
models, the principle of materials balance is not included in the model. Victor’s
(1972) models provide the exception to this general rule.
Table 8.5 shows the general structure of Leontief’s extended model.
Thus, matrix A is the traditional input-output matrix relating inputs to outputs,
consisting of elements a ij .
Matrix B relates industrial inputs to pollution elimination activities.
Matrix C relates pollution emissions to industrial outputs, so that the components
here are the pollution coefficients.
Matrix D relates antipollution activities to pollution, so that the elements indicate
how much pollution reduction takes place as a result of antipollution activity.
By operating the model, Leontief is able to estimate the impact on the level of
emissions in individual industries of specific levels of final demand. At the aggregate
level, the model allows estimating the total level of pollution that will arise for a
specified projected level of final demand. The model can also assess the price effects
of specific antipollution measures, a feature of input-output which seems desirable
from the government’s perspective.
8.9.5 Limitations of Input-Output Models
Although the extension of an I-O analysis to environmental phenomena seems to be
straightforward, it leaves several problems unsolved. Some these are due to inherent
Table 8.5 Leontief’s
extended model
Industry outputs Anti-pollution activities
Industry inputs
A
B
Pollution outputs C
D
242
8 Analysis of Environmental Impacts of Infrastructure