Capital Costs: Yale Research Offers Truer Calculation of ‘Footprint’ of Purchases


Researchers at Yale have created a model that enables more accurate calculations of the environmental footprints associated with a range of industrial processes — and the products and services we purchase.

If one wants to calculate the environmental impact of purchasing a product or services, they must consider the role of the capital assets that went into their production — machinery, factories, IT, vehicles, and roads — and the energy and materials required to create those assets. For instance, any assessment of the environmental “footprint” of renting a home should include the materials and processes that went into its construction.

However, many of the models used to assess the impacts of purchases — known as “environmentally extended input-output” (EEIO) analyses — don’t incorporate data that would account for the contributions of these capital assets. As a result, most analyses underestimate the carbon, energy, and material footprints.

In order to get a more accurate estimate, Yale researchers have developed a new model using the most recent detailed economic data available, from the years 2007 and 2012. The model incorporates those capital assets into the production supply chains, providing a more comprehensive understanding of the environmental impacts associated with a range of sectors, from mining to government to media. According to their analysis, use of capital assets for production in 2012 accounted for 13 percent, 19 percent, and 40 percent of the economy-wide carbon, energy, and material footprints, respectively.

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