ABSTRACT
Consumption of goods and services may have both direct and indirect effects on the environment. Bottom-up and top-down approaches have been developed to assess environmental impacts of different goods and services throughout the whole life cycle. Bottom-up approaches use detailed description of individual production processes and associated environmental impacts such as process-based life-cycle analysis (PLCA). A PLCA approach can lead to significant truncation errors in the calculations due to an artificial cut-off when defining the system boundaries and also lack a spatial dimension due to the missing of trade connections between production processes. Multi-region input-output analysis (MRIO) is a popular top-down approach based on monetary flows among sectors and regions and has become a widely used tool to establish consumption-based accounts for analyzing complex global supply chains, and as a tool to connect distal (teleconnected or telecoupled) natural and human systems. The MRIO approach considers the entire (global) economy as system boundary. It also distinguishes intermediate and final products, and includes inter-sectoral flows in monetary values as well as environmental terms (referred to as virtual, embodied, or embedded flows) within and between countries. Therefore, environmental impacts throughout global supply chains can be captured and allocated to a wide range of final products, in other words, the system boundary is complete.
