ABSTRACT
Input–output structural decomposition analysis (IO-SDA) is currently widely employed to identify sources of fluctuations in demand and supply throughout the entire economic system. In the fields of environmental economics and energy economics, it gives us a number of useful economic and environmental inventories that identify sources of the increases or decreases in embodied energy requirements and in embodied air pollutants in various countries such as the United States (Rose and Chen 1991; Casler and Rose 1998), China (Lin and Polenske 1995), Mexico (Gale 1995), Denmark (Wier 1998), and Japan (Kagawa and Inamura 2001). Unfortunately, these studies basically focused only on the domestic production structure and did not consider the effects of changes in intercountry linkages on energy demand and the environment. Such a focus obviously imposes various limitations on identifying the effects of foreign input technology changes on domestic energy demand. The well-known multiregional input–output model should be connected with the energy–environmental model in order to measure the intercountry linkage effects.
