Incorporating New Technologies in EEIO Models

We propose a methodology to add new technologies into Environmentally Extended Input-Output (EEIO) models based on a Supply and Use framework. The methodology provides for adding new industries (new technologies) and a new commodity under the assumption that the new commodity will partially substitute for a functionally-similar existing commodity of the baseline economy. The level of substitution is controlled by a percentage (%) as a variable of the model. In the Use table, a percentage of the current use of the existing commodity is transferred to the new commodity. The Supply or Make table is modified assuming that the new industries are the only ones producing the new commodity. We illustrate the method for the USEEIO model, for the addition of second generation biofuels, including naphtha, jet fuel and diesel fuel. The new industries' inputs, outputs and value-added components needed to produce the new commodity are drawn from process-based life cycle inventories (LCIs). Process-based LCI inputs and outputs per physical functional unit are transformed to prices and assigned to commodities and environmental flow categories for the EEIO model. This methodology is designed to evaluate the environmental impacts of substituting products in the current US economy with bio-versions, produced by new technologies, that are intended to reduce negative environmental impacts. However, it can be applied for any new commodity for which the substitution assumption is reasonable.