Supply Chain Factors Contributing to Improved Material Flow Indicators but Increased Carbon Footprint

Improvements in four material flow indicators (MFIs) have helped facilitate Japan's transition to a sound material-cycle society. However, the economic and technological factors that have affected these MFIs have not been identified previously. Moreover, it is unclear whether the improvements in the MFIs have contributed to Japan's progress toward carbon mitigation. In this study, we quantified the contribution of the factors in the capital-embodied supply chain to changes in the MFIs at the national and sector levels. We also examined the consistency of MFI improvements with carbon footprint reduction. Our results show that, in many sectors, structural changes in the supply chain improved two of the MFIs (resource productivity and material circularity) but increased the carbon footprint of the sector. To address this conflict, producers need to manage their supply chains based on an understanding of the nexus between material consumption and carbon emissions, paying particular attention to supply chains associated with capital formation.