Estimating Raw Material Equivalents on a Macro-Level: Comparison of Multi-Regional Input-Output Analysis and Hybrid LCI-IO

The mass of material consumed by a population has become a useful proxy for measuring environmental pressure. The raw material equivalents (RME) metric of material consumption addresses the issue of including the full supply chain (including imports) when calculating national or product level material impacts. The RME calculation suffers from data availability, however, as quantitative data on production practices along the full supply chain (in different regions) is required. Hence, the RME is currently being estimated by three main approaches: (1) assuming domestic technology in foreign economies, (2) utilizing region-specific life-cycle inventories (in a hybrid framework), and (3) utilizing multi-regional input output (MRIO) analysis to explicitly cover all regions of the supply chain. While the first approach has been shown to give inaccurate results, this paper focuses on the benefits and costs of the latter two approaches. We analyze results from two key (MRIO and hybrid) projects modeling raw material equivalents, adjusting the models in a stepwise manner in order to quantify the effects of individual conceptual elements. We attempt to isolate the MRIO gap, which denotes the quantitative impact of calculating the RME of imports by an MRIO approach instead of the hybrid model, focusing on the RME of EU external trade imports. While, the models give quantitatively similar results, differences become more pronounced when tracking more detailed material flows. We assess the advantages and disadvantages of the two approaches and look forward to ways to further harmonize data and approaches.