Lutter, S., Wilting, H., Wiedmann, T., Palm, V., Giljum, S. (2008)

ERA-NET SKEP Project EIPOT (Development of a methodology for the assessment of global environmental impacts of traded goods and services)

1.1 Background
Issues related to environmental consequences of intensifying international trade have gained significant importance in European Union (EU) and worldwide policies in the past few years. This is emphasised, for example, in the revised EU Sustainable Development Strategy , the Thematic Strategy on the Sustainable Use of Natural Resources and in the upcoming EU Action Plan on Sustainable Consumption and Production. Products are increasingly produced in one part of the world, taken into another country and then redistributed to their final country of consumption. In order to promote and understand sustainable consumption and production, there is a need to capture the whole life cycle costs of products and services (in terms of emissions, water use, material flows, etc) in order to be able to fully quantify the environmental impacts of consumption and trade. However, there is an absence of an accepted approach towards quantifying and
assessing the trans-national impacts of consumption. Many existing methodologies such as life-cycle assessment (LCA), resource flow and material flow analysis rely on average data and do not easily allow for local impacts of production and consumption, or infrastructure associated with production, use and disposal. This is especially important when assessing products and services whose production-consumption chain spans across several national boundaries.

The SKEP network wishes to develop a suitable methodology to assess such trans-national environmental impacts and is funding the EIPOT Project (“environmental impacts of trade”). This project aims to bring together existing knowledge and ongoing research for the assessment of global environmental impacts of traded goods and services. It will review past and current accounting methodologies and then identify, specify and develop a suitable integrated approach, which can be applied by SKEP member states and other countries.

1.2 Aim of the project
The main objective of the EIPOT Project is to develop and specify an environmental accounting methodology which allows quantifying and assessing the trans-national environmental impacts of traded goods and services. More specifically, this project aims to:
• Review and comparatively evaluate a large number of existing environmental accounting techniques that allow to illustrate trans-national impacts of traded goods and services,
• Identify the most suitable methodology and develop it further into an accounting approach, which can be applied by all SKEP member states,
• Specify the (theoretical) framework and define criteria for environmental accounting methodologies to be suitable for the assessment of environmental impacts of imported and exported goods and services,
• Identify data requirements and suggest possible date sources for the improved methodology, and
• Elaborate the roles of different regulatory authorities in providing required data and advice on the practical implementation of the methodology.

1.3 Approach
The project aims to provide a comprehensive comparative assessment and evaluation of different methods and tools which are currently applied to assess the environmental implications of international trade. The project will identify and specify an accounting approach which is suited to the specific requirements of the SKEP member states. During the course of the project, the specific policy issues of SKEP member states relating to environmental pressures from traded products will be identified and the development of a suitable model will take these requirements into account from the beginning.

1.4 Interim Report (WP3)
The present interim report constitutes the deliverable of work package 3 (WP 3) – Review and comparative assessment of existing approaches – of the EIPOT project . The RACER evaluation framework developed in a previous work package has been applied to different environmental accounting approaches. The report contains the results of the evaluation in relation to trans-national impacts. In succession, WP 4 is devoted to the further methodological development and specification of the most suitable approach(es) identified in WP 3.

The following methods/approaches have been evaluated using the RACER framework:

• Life-cycle Analysis / Resource Accounting
  o LCA
  o MFA-LCA (MIPS)
  o National Ecological Footprint Accounts and variant methods
  o Water Footprint
• Environmental Input-Output Analysis
  o Single-Region IOA; emissions, energy and land use and EF
  o Single-Region IOA; materials
  o Single-Region IOA; water
  o Multi-Region IOA; emissions, energy, materials and land use
  o Multi-Region IOA; Ecological Footprint
• Hybrid approaches
  o Hybrid LCA (hybrid of IOA and Process Analysis)
• Dynamic Models
  o Econometric Models
  o Dynamic Ecological Footprint

A workshop has been organised as milestone of WP 3, where the group of stakeholders identified in WP 2 will review the draft results and contribute to the definition of the work undertaken in WP 4 and WP 5. It is also suggested that the three external experts of this consortium (NTNU, AKF, ISA/USyd) review and comment on the draft interim report and that at least two of the external experts be invited to attend the workshop. Based on the results of the assessment during the workshop a ranked short list of suitable methodologies will be compiled from which the most suitable will be selected for further development in WP 4.

Download PDF.