An Impact Inheritance Approach to the Estimation of the Carbon Footprints of Economic Activities

Abstract

One of the applications where ICT has a positive effect to fight climate change is the calculation and monitoring of carbon footprints of economic activities both at macroeconomic scales and at product level scales. Using an intuitive graph description of economic exchanges, this paper revisits Leontief’s mathematical framework of economic input output economics used to calculate the consumption footprint of the final demand of country-wide economies. In addition to the classical production structure approach of Leontief’s linear framework, a linear impact inheritance approach is introduced, based on the tracing and the integration of carbon emissions along the economic value chains. For both approaches, we derive simple formulas to calculate the production footprints of all intermediate production sectors. Doing that with the impact inheritance approach requires the analysis of looping economic supplies and leads to the definition of a systemic looping factor for each economic activity, which in turn can also be calculated with the production approach, under certain conditions. Using eigenvector analysis, it is possible to consider a fully looped economy whereby final demand is viewed as a supplier of workforce to the production sectors. Using these various formulas and tools, we derive different ways to share the allocation of emissions between the final demand and the intermediate production sectors. In addition to the closed form formulas that are appropriate for low dimensionality modelling of the economy, graph processing algorithms can be introduced to treat graphs with a higher number of nodes, opening the perspective of calculating footprints with fine-grained descriptions of the economy.