PARENT SESSION

(04-10) Joining engineering and economic perspectives in an integrated assessment of economic systems.

Kytzia, Susanne¹, Faist, Mireille^1,2, Najar, Christine^*,1, ¹ Swiss Federal Institute of Technology Zurich (ETHZ), Zurich, Switzerland² ESU-services, Uster, Switzerland

ABSTRACT- Input-Output-Analysis (IOA) is an appropriate tool to evaluate effects of technological or behavioral changes on productivity and employment. It reveals the interrelations between economic processes, which are based on commodity flows. Its capacity to include environmental issues in evaluation has improved recently because more and more environmental-related data of economic sectors is available. Yet, cause-effect-relations between economic activity and consumption of natural resources are beyond the explanatory power of a traditional IOA. The main argument is that interrelation between financial output of technical processes and their consumption of natural resources is arbitrary. Prices are determined by the markets and can vary even though technological coefficients in production remain constant. A second - more practical - argument is that in many countries IO-tables are only available on a high level of aggregation. Their coefficients cannot be used to model technological development neither in financial nor in physical terms. Environmental engineers have developed a method for a technology-oriented description of interrelations between economic processes on regional or national scale. This method called Material Flow Analysis (MFA) describes commodity flows in physical units. MFA by itself, however, cannot assess cause-effect-relations between economic activity and consumption of natural resources. The main argument is that economic activity cannot be assessed in physical units only. In our paper we argue that a combination of both approaches could help to overcome these shortcomings. It can be achieved with an analytic tool to assess material, energy and financial flows on a low level of aggregation based on the definition of a common system. In our paper we introduce an extended MFA in a case study of the regional food production and consumption chain and compare this method to a sector-oriented IOA. We finally discuss the potential of an extended MFA as a basis for further development of an integrated assessment tool for strategies in sustainable development.

Key words: Input-Output-Analysis , Material Flow Analysis , sustainable development, economic-ecological modelling