This report investigates methods for the assessment of global environmental impacts of traded goods and services. The report reviews and evaluates environmental accounting methodologies and specifies a suitable integrated approach for quantifying trade-related impacts from a consumption perspective. In addition, the report elaborates on the role of regulatory authorities and advises on the practical implementation of future research.
Accounting for the environmental impacts of trade
International trade in goods and services is rising, driven by increased specialisation and globalisation of production and consumption. In order to quantify the environmental impacts associated with growing trade between nations and the compilation of environmental trade balances several methods are available. The report investigates these methods and makes a proposal for the most suited accounting approaches.
The report looked at five policy dimensions – economic, environmental pressure/impact, geography, time, and life cycle stage – in order to understand the specific requirements for the methodology. The primary focus of the evaluation was on trade flows between different economies and production sectors within them, rather than on individual traded products.
As methodological basis, the report suggests an environmentally extended multi-region input-output (EE-MRIO) framework closely connected to the System of Economic and Environmental Accounts (SEEA). Specific policy and research questions can then be addressed by building upon the EE-MRIO structure, using various forms of hybrid modeling (combining input-output analysis with process data).
The report is the final result of the Environmental ImPact Of Trade (EIPOT) project carried out by a consortium of four European research institutions (SEI-York, SERI, Statistics Sweden and The Netherlands Environmental Assessement Agency) on behalf of the Scientific Knowledge for Environmental Protection (SKEP) network.