A Note on the Magnitude of the Feedback Effect in Environmentally Extended Multi-Region Input-Output Tables

Area of Science:

• Environmental economics
• Input-output analysis
• Sustainable consumption

Background:

• Global multiregion input-output (MRIO) tables track international economic spillovers from consumption and production.
• International spillovers are increasingly significant, particularly in environmental impact assessments.
• Existing MRIO models may not fully integrate national input-output tables (IOTs), potentially misrepresenting feedback effects.

Purpose of the Study:

• To quantify the magnitude of "feedback effects" in international trade for various environmental impacts.
• To assess the proportion of domestic production embodied in a region's imports.
• To evaluate the suitability of using standard MRIO multipliers for national IOT analysis.

Main Methods:

• Analysis of global multiregion input-output (MRIO) tables.
• Calculation of domestic production embodied in imports (feedback loops).
• Comparison of feedback loop sizes across different countries, years, and environmental stressors.

Main Results:

• Feedback effects for emissions are generally small, usually less than 2% of the total import footprint.
• For certain countries and years, feedback effects can reach up to 6% for specific environmental stressors.
• The study quantifies the domestic production embedded within imports back into the originating region.

Conclusions:

• The impact of feedback loops on overall import footprints is often minor for environmental analyses.
• Using standard Leontief multipliers from MRIOs is likely acceptable for modeling imports in national IOTs.
• Findings support the validity of current MRIO approaches for understanding global consumption impacts.