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An environmental assessment of future production-related technological change: 1970–2000 (An input-output approach)
TECHNOLOGICAL
FORECASTING
An Environmental
AND SOCIAL
CHANGE
5, IS-90
(1973)
Assessment of Future
Production-Related Technological Change: 1970-2000 (An Input-Output Approach) HENRY
W. HERZOG,
JR. “The chief reason for the environmental crisis that has engulfed the United States in recent years is the sweeping transformation of productive technology since World War II.” -Barry Commoner, The Closing Circle
ABSTRACT This paper develops a technique, or model, to systematically assess the environmental impact of specific technological changes forecast to occur over this and the next two decades. The core of the model is a dynamic technical coefficient matrix of a large input-output model. The technological change considered is that which affects the coefficients of this matrix and thus the distribution of material inputs over time into the various sectors of the U.S. economy. An environmental assessment of this production-related technological change is achieved through a submodel that registers production residuals on an industry basis for 14waste categories.
What does the technological future hold in store for us? Will the above-mentioned “crisis” be continued in the future, or even accelerated, through the introduction of new products and production processes? As important as these questions are for the future of mankind, no definite answers are available, for we do not even possess the knowledge to assess the past, namely the intricate relationship between past technological change and today’s environment. How then can this paper proceed? It may only proceed by limiting the scope or connotation of technological change itself. Technological change can be viewed as knowledge that leads to new or improved processes or products for the satisfaction of final and intermediate demands in the economy. This study will consider technological change as it affects intermediate demands only, and will exclude the creation of new products. Thus, the results that follow should only be considered as a sample of what is likely to stem from one category of future technological change. However, the model developed below is readily adaptable to all categories. Our assessment of the technological-environmental relationship in the U.S. economy will proceed at three levels of inquiry. The first, and most detailed, is an examination of technological change at the industry level. At this level each technological change that is operative will be studied as to its individual impact on the environment. In the second level an environmental assessment is made for each type of technological change in the economy as a whole. The third level will compare the total environmental impact in the MR. HERZOG is a doctoral candidate in Economics Economic Research, University of Maryland.
and Faculty Research Assistant in the Bureau of Business and
o American
Elsevier Publishing
Company,
Inc., 1973
76
HENRY
W. HERZOG,
JR.
year 2000 of the U.S. economy with and without all projected technological change between I970 and 2000. These three levels of inquiry provide a convenient and systematic framework for the presentation of both the environmental assessment model and the results derived from it. The Technological Change-Environmental Assessment Model The model to be outlined below is essentially an input-output model of the U.S. economy with dynamic. or time-dependent. technical coefficients.’ Appended to this model is an environmental submodel. also dynamic with respect to time. that registers production related pollution generation on a gross and net of treatment basis. * Before developing the model, a quick summary of its dimensions seems warranted. The input-output model has 179 industry sectors. Most of these sectors generate at least one pollutant and several generate as many as fourteen pollutants. Technological change affects every sector but not every technical coefficient. Thirteen types of technological change were selected for this study, the selection based principally on data availability. The technological change types and the pollutants considered in this study, along with the abbreviations used throughout this paper for the latter, are listed in Table I. The specification of the model begins with the traditional input-output equations. Let y and x be n-dimensional column vectors of final demands and outputs respectively. Let A be an n-order matrix of technical coefficients atj>O, where oij is equal to the dollar purchases of industry j from industry i required per dollar of output produced in industry j. Then: Ax+y=x
(1)
and x = (I - ,4)-‘ y. Equations (I) and (2) define the static input-output system. Technological change may be entered explicitly within this system by functionally relating the technical coefficients with time. It is important to note at this juncture between the static and dynamic economy the exact change” should assume for this study. Traditional context the term “technological economic theory makes a clear-cut distinction between technological change (shifts in the production function) and technical change or input substitution (shifts along a fixed production function). Since the projected changes in the technical coefficients used in this study were derived from past trends over periods of time where both technical and technological changes were active, the projections themselves cannot be viewed as pure technological change under the traditional definition.3 By the same reasoning our projections cannot be considered free of past trends in technology diffusion.
‘The technical coefficients are those used in the Maryland Interindustry Forecasting Model. The parameters deping sectoral level technological change were obtained from [3]. Although several of these input-output environmental models have been presented in the literature, the first, to the author’s knowledge, is that described by John H. Cumberland in [7]. Also, see [6] or (81. The pollution generation and treatment coefficients used in the environmental submodel were obtained from [2]. 3For an interesting discussion of this problem see (41,
pp. 9-l I.
ENVIRONMENTAL
ASSESSMENT
OF TECHNOLOGICAL
CHANGE
77
With these definitional problems in mind the static technical coefficients of Eq. (I) and (2) may be redefined as functions of time. t, where: U;j(t) =Uij(-m) +f(k,
U,
t)[Uij
(+O”) -
Uij(-m)]
(3)
and @(r-u) f(k. U, t) = 1 + ek(r-u)
.
(4)
Thus. the current value of a technical coefficient aii(t) is equal to its historical minimum value plus a fraction of its total expected change time.4 The fraction, flk, u, t), is defined by a two-parameter logistic function. Eq. (4). that takes values with f, for any given k and u. between zero and one. The parameter u defines the year in which the technological change is half complete. The parameter k determines how rapidly the function approaches its lower and upper limits from the midpoint. If A(t) is the technical coefficient matrix of the newly defined time-dependent technical coefficients, aij(t). and B(t) is an n-order matrix. then the functional relationship that links outputs and final demands is also a function of time. Thus: x = E(r) y
(5)
where : B(t) = [I-
A(t)]-‘.
(6)
Pollution generation can be considered to stem from two primary sources, the production of goods and the use of goods. Automobiles not only create air pollution in their use-and solid waste when this usage is terminated-but also generate air, water, and solid residuals during their production. It is this latter type of waste generation, pollution from production. that will be examined with respect to future technological change in the pages that follow. In this model wastes stemming from production are tied directly to output levels. For any particular industrial sector the production-waste generation process may be considered as three distinct subprocesses. The first subprocess is the creation of the economic output itself with labor, capital, and material inputs from other sectors of the economy. Technological change of the type already defined affects the relative importance, and thus the quantities consumed, of the material inputs from other sectors. The second and third subprocesses concern the generation and treatment of the residuals stemming from production activities in the first subprocess. Technological change is also active in these latter processes and will affect the intensity of waste generation and treatment occurring there. In the discussion that follows technological change that affects the first subprocess will always be distinguished from technological change occurring in the second and third subprocesses in order to separate and assess their individual impacts. Let gip(?) be the physical amount of pollution of type p generated per million dollars of output in sector i in year r. If ep(t) is the average treatment efficiency projected for
4For a detailed account of the estimation of Eq. (3) and(4) see [3]
78
HENRY
W. HERZOG,
JR.
pollutant type p in year t, and xit is the output of sector i in the same year, then the total amount of pollution of type p discharged to the environment in year t from sector i is [ 1-
ep(41 gi, (tht.
(7)
With these definitions in mind the model can best be described at each of the three levels of inquiry mentioned above. TECHNOLOGICAL
CHANGE AND POLLUTION
AT THE INDUSTRY LEVEL
At this level of inquiry our attention will focus on the wastes created in the production processes of all industries stemming from the satisfaction of unit final demands for the products of individual industries. In order for the motor vehicles and parts sector of the economy to satisfy one million dollars of final demand for its products, it must purchase inputs from many other sectors of the economy. These sectors, in turn, require inputs from other sectors themselves. Thus, a final demand for the products of any one industry solicits output from all industries and thus the generation of waste residuals throughout the economy. Technological change affects this relationship in two ways: first through changes in the distribution of intermediate demands and second through changes in the intensity of residuals generation and treatment on a unit output basis. As already stated each warrants an environmental assessment. Let bij(t) be the i, fib element of the matrix B(S) defined in Eq. (6). Denote by BS(t) and bSij (t) the matrix and i, $h element of that matrix formed from B(t) where only s-type technological change (Table 1) is allowed to function at time t.5 In the discussion that follows the matrix B(t) or its elements written without the superscript s denote full technological change at time t. In this latter case all technological changes listed in Table 1 are active in the economy. The technical coefficients, which represent millions of dollars of inputs required per million dollars of output, are based on constant 1967 dollars, as are all other coefficients and variables in the model.
TABLE Technological
change
types:
Plastic for glass containers Vinyl for leather Polyolefins for pulp Plastic products for steel Aluminum for steel Fiberglass for glass and steel Electric power for labor Computer services for labor Acrilan for wool Knits and paper for woven goods Telephone for postal services Air for rail transport Aluminum for copper
1 Pollutants
(abbreviations):
Particulates (Part) Hydrocarbons (HC) Oxides of sulfur (SOX) Carbon monoxide (CO) Oxides of nitrogen (NOX) Waste water (WW) Chemical oxygen demand (COD) Biochemical oxygen demand* (BOD) Suspended solids (SS) Dissolved solids (DS) Nitrogen (N) Phosphorus (P) Solid waste (Solid) Heat (Heat)
*5-day
5The matrices B(r) and B’(t)for t >I967 were obtained from B( 1967) by employing the computation rules for changing the inverse of a matrix when one column or row of the matrix is changed. See [I], pp. 22, 23.
ENVIRONMENTAL
ASSESSMENT
OF TECHNOLOGICAL
19
CHANGE
The waste residuals, or pollution, of type p discharged to the environment million dollars of final demand for goods produced in sector k is equal to: type s technological change only: [ 1 - ep(t)] 2
b$ (tl) gi, (tz)
i=l
all technological
in year rper
(S = 1) 13) 0, = 1, 14);
(8)
@= 1, 141,
(9)
change:
11- e,(t)]
2 bik(tl)gip(t2)
i=l
where: (tl = t; tz = 1970): year t technical coefficients, I970 pollution generation and treatment technology; (tl = 1970; t2 = t): 1970 technical coefficients, year t pollution generation and treatment technology; (t1 = t; r2 = t): year t technical coefficients, year t pollution generation and treatment technology. TECHNOLOGICAL
CHANGE
BY TYPE,
AND
POLLUTION
FROM
THE ECONOMY
At this second level of inquiry each technological change type (Table I) will be examined as to its relative impact on the total waste loadings from the economy in the year 2000. To accomplish this a pollutant by pollutant comparison can be made among technological change types, or between any one type and a year 2000 economy with no technological change, of any type, past 1970. These comparisons will be made using the year 2000 pollution generation and treatment technology. If yit is the final demand for sector i in year t, then the total pollution of type p in the year 2000 under technological change s is: [ 1 - ep(t)]
2 gip(f) f i=l
FULL TECHNOLOGICAL
CHANGE
X&t)Yjt
j=l
AND POLLUTION
(s = 1,13) = 1,14) t = 2000.
@
(10)
FROM THE ECONOMY
At this final level of inquiry into the relationship between technological change and an assessment will be made as to the total production-related waste generation, environmental impact of input substitution that is projected to occur between 1970 and 2000. Residuals stemming from production in 2000 will be computed first using the technological knowhow that existed in 1970, and second that knowhow (input-output technical coefficients) projected for the end of this century. Both computations will use the year 2000 waste generation and treatment coefficients and sectoral final demands. For any pollutant p, the total waste load released to the environment is equal to:
[1 - e&N f
i=l
gipCt)
2 bij(t*)Yjt
j=l
(t* = I970), I970 technical coefficients, (t* = 2000), year 2000 technical coefficients
@= 1,14) t=2000
(11)
80
HENRY
W. HERZOG,
JR.
Technological Change and the Environment-an Assessment This segment of the study will consider a sampling of the results obtained under the application of the assessment model just described. It is hoped that a cursory examination of the results will increase our understanding of the dynamic nature of technological change as an interface between the physical environment and the U.S. economy. We would hope, at a minimum, to be able to identify those technological trends that, on balance, are environmentally damaging through their effects on production-related residuals generation. With this in mind we may cautiously approach the results.
TECHNOLOGICAL
CHANGE
AND POLLUTION
AT THE INDUSTRY
LEVEL
Tables 2-5 present detailed information on the relationship between technological change and residuals generation for four of the 179 industries studied. These industries, selected as a representative cross-section of the U.S. economy, are the canned and frozen foods industry, the apparel industry, the leather footwear industry, and the motor vehicles and parts industry. The pollution levels and ratios listed in these tables pertain to the residuals generated throughout the U.S. economy per one million dollars (1967) final demand for the sector under consideration. Part A of each table presents information, by pollutant, for several technological scenarios defined by input mix (technological change affecting the input-output technical coefficients) and waste generation and treatment technology. In this part of each table no distinction is made between the technological change types (Tablel) that are active in this sector; all operate at once. Part B, however, considers the individual influence of each technological change, or substitution type, that is active in the future for the sector, plus signs indicating, for a specific pollutant, that the particular substitution type causes greater pollution loads than would occur if no technological change occurred in that sector between 1970 and 2000. Negative entries indicate the opposite. These comparisons in part B of each table are made under a constant level of waste generation and treatment. Columns 24 of Table 2 (part A) show that technological change of the input substitution variety causes 1I of the 14 unit pollution loads to increase over their 1970 values on a delivery to final demand basis in the canned and frozen foods sector. Only particulate air emissions, thermal loads, and solid waste decrease. Columns 5-7 indicate the dramatic reduction in unit waste loads between 1970 and 2000 resulting from changes in pollution generation and treatment technology. These latter computations are made with the 1970 technical coefficients; thus, input substitution projected past 1970 was not allowed to operate. Columns 8-10 combine both types of future technological change. Part B of Table 2 examines technological change of the input substitution variety by substitution type and pollutant for those substitutions forecast to be active in the canned and frozen food sector between 1970 and 2000. It is seen that the substitution of plastic for glass containers in packaging causes reductions per unit delivery to final demand in particulates, oxides of sulfur and nitrogen, thermal loadings, and solid waste. Some idea of the relative impact of each type of substitution listed as active in part B may be gained through an examination of three pollutants. Columns 2-4 of part A, Table 2, indicate that technological change of the input substitution variety causes, on balance, particulates to decrease and oxides of sulfur and nitrogen to increase. A quick examination of part B of this same table reveals the dominance in these calculations of two substitution and electric power for labor. Similar types, namely plastic for glass containers conclusions can be drawn for several of the remaining pollutants.
0.974 1.005 1.018 1.004 1.014 0.297 1.000 1.000 1.007 1.000 1.035 1.000 1.000 1.000
1980 0.928 1.014 1.034 1.011 1.023 0.992 1.001 1.001 1.018 1.001 1.092 1.001 1.001 0.999
1990 0.908 1.019 1.05 1 1.016 1.038 0.989 1.001 1.001 1.024 1.001 1.120 1.001 1.001 1.000
2000
Current input mix, 1970 pollution generation and treatment technology (ratios to 1970)
0.781 0.940 0.826 0.996 0.794 1.000 1.000 1.000 0.925 0.939 0.900 0.933 0.967 0.978
1980 0.561 0.870 0.685 0.967 0.623 1.000 1.000 1.ooo 0.862 0.882 0.841 0.866 0.933 0.958
1990 0.353 0.791 0.546 0.914 0.459 1.000 1.000 1.000 0.810 0.828 0.823 0.800 0.900 0.939
2000
1970 Input mix, current pollution generation and treatment technology (ratios to 1970)
+
_ + + + +
Plastic for glass containers Electric power for labor Computer services for labor Telephone for postal services Air for rail transport +
HC +
sox
+
+ +
co
_
+ _
NOX
+ + + +
Heat
+
+
WW
Pollutants
+
+ +
COD
+ _
BOD
(B) Types of Input Substitution Taking Place Between 1970 and 2000, and Their Effects on Pollution Generation per Million Dollar (67) Delivery to Final Demand (1970 Pollution Generation and Treatment Technology) (Blank = No Change, + = Increase, - = Decrease)
95.6 43.9 83.9 15.5 18.2 15.1 441.9 271.3 117.8 1323.7 136.8 33.3 11.2 11.5
Part
(Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (10” Btu.) (Mil. gals.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Mil. Ibs.)
Part HC sox co NOX Heat WW COD BOD ss DS N P Solid
Amount in 1970
Substitution type
Dimension
Name
Pollutants
TABLE 2 Sector No. 25, Canned and Frozen Foods
(A) Pollution Loadings per Million Dollar (67) Delivery to Final Demand Under Various Technological Scenarios
Input-Output
+
+ +
SS
+
DS
0.760 0.944 0.840 1.ooo 0.806 0.997 1.001 1.000 0.930 0.939 0.929 0.933 0.967 0.978
1980
+
+ + -
N
+
+ + -
+
_ +
Solid
0.304 0.806 0.569 0.928 0.478 0.989 1.001 1.001 0.824 0.829 0.905 0.801 0.901 0.939
0.513 0.882 0.706 0.977 0.638 0.992 1.001 1.001 0.875 0.882 0.907 0.867 0.934 0.957
P
2000 1990
Current input mix, current pollution generation and treatment technology (ratios to 1970)
Electric power for labor Computer services for labor Knits and paper for woven goods Telephone for postal services Air for rail transport
type
1.022 0.999 0.993 1.064 1.014 1.011 0.932 0.936 1.016 0.943 1.014 0.933 4935 0.953
47.1 31.2 551.9 8.8 15.5 1.9 114.5 55.2 84.3 273.0 244.8 6.9 2.3 3.4
(Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (10” Btu.) (Mil. gals.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Mil. lbs.)
Part HC sox co NOX Heat WW COD BOD ss DS N P Solid
1.059 0.997 0.978 1.182 1.028 1.032 0.802 0.812 1.045 0.835 1.041 0.806 0.811 0.859
1990 1.099 0.992 0.96 1 1.312 1.041 1.055 0.656 0.671 1.078 0.712 1.070 0.66 1 0.670 0.75 1
2000 0.760 0.93 1 0.777 0.960 0.798 0.999 0.999 1.000 0.913 0.940 0.863 0.933 0.967 1.015
1980 0.505 0.862 0.598 0.911 0.631 0.998 1.000 1.000 0.834 0.884 0.779 0.866 0.934 1.031
1990 0.257 0.791 0.431 0.853 0.473 0.998 1.001 1.000 0.764 0.83 1 0.749 0.800 0.900 1.047
2000
1970 Input mix, current pollution generation and treatment technology (ratios to 1970)
+ t _ + +
+ _
_
+
HC
Part + + _ t t
sox
_ t _ _
+ _
_ t
Heat
NOX
co
+ t _ + +
WW
Pollutants
t t _ + +
COD
t _ _
_
BOD
(B) Types of Input Substitution Taking Place Between 1970 and 2000, and Their Effects on Pollution Generation per Million Dollar (67) Delivery to Final Demand (1970 Pollution Generation and Treatment Technology) (Blank = No Change, + = Increase, - = Decrease)
1980
Amount in 1970
Current input mix, 1970 pollution generation and treatment technology (ratios to 1970)
Dimension
Substitution
TABLE 3 Sector No. 39, Apparel
Loadings per Million Dollar (67) Delivery to Final Demand Under Various Technological Scenarios
Name
Pollutants
(A) Pollution
Inputautput
+ t _ + t
SS
_ + _ _
DS
0.777 0.93 1 0.772 1.023 0.809 1.010 0.932 0.936 0.93 1 0.887 0.877 0.871 0.905 0.97 1
1980
+ + _ t t
N
0.540 0.859 0.585 1.092 0.648 1.031 0.805 0.812 0.891 0.737 0.822 0.698 0.757 0.905
1990
t t
t t
P
+ +
+ t
Solid
0.294 0.785 0.4 14 1.164 0.491 1.054 0.664 0.671 0.866 0.589 0.826 0.529 0.603 0.836
2000
Current input mix, current pollution generation and treatment technology (ratios to 1970)
?
.x
8 R
3
g
3
1.168 1.095 1.089 1.160 1.064 1.142 1.053 0.988 1.202 1.011 1.295 0.988 0.988 1.084
1980
1.103
0.978
1.215 1.116 1.118 1.201 1.082 1.176 1.063 0.978 1.254 1.007 1.372 0.979
1990 1.223 1.116 1.129 1.203 1.092 1.177 1.062 0.976 1.255 1.006 1.375 0.977 0.976 1.106
2000
Current input mix, 1970 pollution generation and treatment technology (ratios to 1970)
0.76 1 0.931 0.785 0.968 0.795 0.999 1.007 1.000 0.921 0.934 0.866 0.933 0.967 1.060
1980 0.504 0.861 0.612 0.927 0.624 0.999 1.019 1.ooo 0.859 0.874 0.786 0.866 0.933 1.121
1990 0.252 0.790 0.450 0.880 0.462 0.999 1.034 1.000 0.811 0.821 0.760 0.800 0.900 1.184
2000
1970 Input mix, current pollution generation and treatment technology (ratios to 1970)
HC +
-
+
_ _
Vinyl for leather Aluminum for steel Electric power for labor Computer services for labor Telephone for postal services Air for rail transport -
+
+
sox
-
+
co
-
+
+
NOX
-
+
Heat
-
+ _
WW
Pollutants
+ + + f +
COD
_
_
+
BOD
(B) Types of Input Substitution Taking Place Between 1970 and 2000, and Their Effects on Pollution Generation per Million Dollar (67) Delivery to Final Demand (1970 Pollution Generation and Treatment Technology) (Blank = No Change, + = increase, - = Decrease)
51.3 26.9 125.9 9.9 25.7 2.0 30.8 24.4 55.2 131.0 193.1 2.9 1.0 2.0
Part
(Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (10” Btu.) (Mil. gals.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Mil. lbs.)
Part HC sox co NOX Heat ww COD BOD ss DS N P Solid
Amount in 1970
Substitution type
Dimension
Name
Pollutants
TABLE 4 Sector No. 75, Leather Footwear
(A) Pollution Loadings per Million Dollar (67) Delivery to Final Demand Under Various Technological Scenarios
Input-Output
+ + + + + +
SS
+
DS
0.887 1.018 0.855 1.117 0.847 1.141 1.065 0.988 1.095 0.943 1.115 0.922 0.955 1.152
1980
+ t + t +
N
+ + t + +
P
0.6 11 0.959 0.685 1.105 0.678 1.175 1.092 0.978 1.055 0.880 1.065 0.848 0.913 1.242
1990
t
+
Solid
0.307 0.881 0.510 1.051 0.508 1.175 1.110 0.976 0.995 0.825 1.030 0.782 0.878 1.318
2000
Current input mix, current pollution generation and treatment technology (ratios to 1970)
1990 0.607 0.868 0.767 1.008 0.622 0.999 1.054 1.000 0.829 0.852 0.766 0.866 0.933 1.237
1980 0.813 0.938 0.869 1.017 0.794 0.999 1.024 1.ooo 0.904 0.921 0.854 0.933 0.967 1.118 0.400 0.789 0.664 0.975 0.459 0.999 1.089 1.000 0.773 0.792 0.736 0.800 0.900 1.355
2000
1970 Input mix, current pollution generation and treatment technology (ratios to 1970)
_ +
_
+ + _ _
Plastic products for steel Aluminum for steel Fiberglass for glass and steel Electric power for labor Computer services for labor Telephone for postal services Air for rail transport _ t
HC
_
+
sox
+
+
co
+ + _ _
_
NOX
_
t _
Heat
+
_
_
WW
Pollutants
_ _ +
_ _ +
COD
_
+ _ + _
BOD
(B) Types of Input Substitution Taking Place Between 1970 and 2000, and Their Effects on Pollution Generation per Million Dollar (67) Delivery to Final Demand (1970 Pollution Generation and Treatment Technology) (Blank = No Change, + = Increase, - = Decrease)
1.198 1.127 0.922 0.978 1.167 1.115 0.884 1.091 1.791 0.901 2.426 1.092 1.091 0.814
1.129 1.081 0.952 0.986 1.110 1.075 0.925 1.055 1.511 0.935 1.921 1.056 1.055 0.880
1.035 1.020 1.ooo 1.003 1.038 1.021 0.987 1.015 1.118 0.988 1.207 1.015 1.015 0.978
69.1 24.3 119.8 11.7 16.5 2.4 22.7 14.2 25.8 103.6 77.3 1.6 0.5 3.8
Part
(Thous. lbs.) (Thous. Ibs.) (Thous. Ibs.) (Thous. Ibs.) (Thous. lbs.) (10” Btu.) (Mil. gals.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Mil. Ibs.)
Part HC sox co NOX Heat WW COD BOD ss DS N P Solid
2000
1990
1980
Current input mix, 1970 pollution generation and treatment technology (ratios to 1970)
Amount in 1970
Substitution type
Dimension
Name
Pollutants
TABLE 5 Sector No. 133, Motor Vehicles and Parts
(A) Pollution Loadings per Million Dollar (67) Delivery to Final Demand Under Various Technological Scenarios
Inputautput
+
_ _ _ +
SS
+ _ _ _
+
DS
0.838 0.957 0.865 1.016 0.825 1.020 1.010 1.015 1.004 0.912 1.027 0.947 0.981 1.093
1980
t
+
N
+
+ _
_
P
0.662 0.936 0.694 0.960 0.695 1.074 0.964 1.055 1.206 0.804 1.449 0.915 0.985 1.082
1990
_ _ _ t _ _ +
Solid
0.440 0.890 0.536 0.885 0.547 1.114 0.936 1.091 1.307 0.728 1.749 0.873 0.982 1.088
2000
Current input mix, current pollution generation and treatment technology (ratios to 1970)
?
P
8
.e
2
%
ENVIRONMENTAL
ASSESSMENT OF TECHNOLOGICAL
85
CHANGE
Tables 3-5 present companion information for the apparel, leather footwear, and motor vehicles and parts industries. It is interesting to note the relative importance of the substitution of knits and paper for woven goods in the apparel industry (Table 3), and the substitution of vinyl for leather in the leather footwear industry (Table 4). Tables 6 and 7 present, in summary fashion, the results of carrying out the calculations required for the tables just discussed over all 179 input-ouput sectors of the model. Table
TABLE 6 Summary Table Showing the Influence of Input Substitution on the Pollution Loadings per Unit Delivery to Final Demand for 179 lnput-<)utput Sectors (1970 Pollution Generation and Treatment Technology) (A) By Pollutant and Time
Number of Input-Output 1990
1980 Pollutant
Decrease
Part HC sox co NOX Heat ww COD BOD ss DS N P Solid
9 5 5 3 10 59 10 7 56 18 10 10 38
Increase
8
Sectors
169 168 172 172 174 167 118 167 170 121 1.59 167 167 139
Decrease
8 8 7 7 3 10 54 9 7 50 18 9 9 33
2000 Increase
Decrease
Increase
169 169 170 170 174 167 123 168 170 127 159 168 168 144
8 8 8 7 4 10 53 9 7 48 18 9 9 32
169 169 169 170 173 167 124 168 170 129 159 168 168 145
Percent of Input-Output 1980
Sectors
1990
2000
Pollutant
Decrease
Increase
Decrease
Increase
Decrease
Increase
Part HC sox co NOX Heat ww
4.5 5.0 2.8 2.8 1.7 5.6 33.0
94.4 93.9 96.1 96.1 97.2
COD BOD ss
5.6 3.9 31.3
DS N P Solid
10.1 5.6 5.6 21.2
4.5 4.5 3.9 3.9 1.7 5.6 30.2 5.0 3.9 27.9 10.1 5.0 5.0 18.4
94.4 94.4 95.0 95.0 97.2 93.3 68.7 93.9 95.0 70.9 88.8 93.9 93.9 80.4
4.5 4.5 4.5 3.9 2.2 5.6 29.6 5.0 3.9 26.8 10.1 5.0 5.0 17.9
94.4 94.4 94.4 95.0 96.6 93.3 69.3 93.9 95.0 72.1 88.8 93.9 93.9 81.0
93.3 65.9 93.3 95.0 67.6 88.8 93.3 93.3 77.7
23 70 0
I 9 0
for copper
0.0 100.0 ::: 0.0
50.0 100.0 9.1 81.3 0.0
50.0 100.0 1.2 7.5 0.0
0.0 100.0 13.9 87.5 0.0
50.0 100.0 11.2 4.2
0.0
Knits Acrilan andfor paper wool for woven goods Telephone Air for rail for transport postal services
0.0 0.0 100.0 98.8 3.0
0.0 58.2 0.0 67.8 4.2
0.0 10.2 0.0 98.8 3.0
52.9 0.0 100.0 18.9 4.8
0.0 30.6 100.0 96.5 6.1
Plastic products for steel Aluminum for steel Fiberglass for glass and steel Electric power for for laborlabor Computer services
0.0 100.0 0.0
100.0 100.0 0.0
0.0 100.0 0.0
100.0 100.0
0.0 100.0 0.0
NOX
co
Plastic for glass containers Viny1 for leather Polyolefins for pulp
Aluminum
7
5 2 0 0 0 0 149 63 0 0 59 76 1
0 2 0 0 66 3 109 12 1 1 15 46 1
100.0 100.0 0.0 0.0 0.0 0.0 87.1 38.2 0.0 0.0 35.8 95.0 100.0
0.0 61.3 100.0 63.7 1.3 100.0 50.0 9.1 51.5 100.0
WW
0.0 100.0 0.0
Heat
4 0 0 21 1 3 126 16 0 0 I 80 0
COD
the Percent
95.5 0.0 100.0 62.6 12.1 100.0 50.0 12.7 38.1 0.0
0.0 1.0 0.0 86.5 37.0 0.0 0.0 33.9 100.0 100.0
88.2 73.5 100.0 54.4 5.5 0.0 50.0 3.6 46.2
0.0
3Y.i 1:o 100.0 13.1 9.1 0.0 0.0 4.2 100.0
0.0
DS
5 2 0 82 0 3 107 20 1 1 21 31 0
DS
100.0 100.0 0.0
SS
4 2 0 0 1 0 148 61 0 0 56 80 1
SS
80.0 100.0 0.0
BOD
That Increase
7: 12 3 93 9 0 1 6 37 0
5 2
BOD
100.0 100.0 0.0
80.0 0.0
COD
Pollutants
Substitution,
WW
Pollutants
That Increase
Heat
Sectors
That Have Input
15 65 0
0 2 0 0 0 3 169 5 1 0 2 5 0
5 2 0 0 57 0 116 I 1 1
sox
HC
type
Part
Substitution
Telephone for postal services Air for rail transport Aluminum for copper
NOX
co
of Input-Output
Sectors
5 2 3 45 0 3 135 8 1 0
0 2 0 0 30 3 165 10 1 1
Plastic for glass containers Vinyl for leather
For Those Input-Output
0 2 0 0 10 0 169 5 1 1 2 6 0
sox
HC
Number
Part
Polyolefins for pulp Plastic products for steel Aluminum for steel Fiberglass for glass and steel Electric power for labor Computer services for labor Acrilan for wool Knits and paper for woven goods
TABLE
N
0.0 100.0 0.0 0.0 0.0 0.0 98.2 17.6 0.0 0.0 17.0 90.0 0.0
80.0 0.0 31.8 1.0 100.0 9.1 13.1 0.0 0.0 4.2 100.0 0.0
35.3 1.0 100.0 13.7 9.1 0.0 0.0 4.2 100.0 0.0
P
Solid
0 2 0 0 0 0 168 29 0 0 28 12 0
4 0 0 21 1 3 126 16 0 0 8; 0
Solid
P
80.0 0.0
N
8; 0
4 0 0 30 1 3 125 16 0 0
the Influence of Input Substitution on the Pollution Loadings per Unit Delivery to Final Demand for 179 InputOutput Sectors (1970 Pollution Generation and Treatment Technology) (B) By Pollutant and Substitution Type
Table Showing
type
Substitution
Summary
B $
< g
2
g
ENVIRONMENTAL
ASSESSMENT
OF TECHNOLOGICAL
CHANGE
87
6 shows that technological change of the input substitution variety causes a majority of the 179 sectors to increase their impact on the environment per unit delivery to final demand. The percentage is highest for oxides of nitrogen (96.6%) and lowest for waste water (69.3%). Table 7 presents similar information by pollutant and substitution type. The lower half of this table shows, for any substitution type and pollutant, the percent of those sectors receiving this substitution that cause greater pollution discharges to the environment per unit delivery to final demand. For example, 73.5% of those sectors that will substitute aluminum for steel between 1970 and 2000 will cause greater amounts of biochemical oxygen demand in the environment per unit delivery to final demand. TECHNOLOGICAL
CHANGE,
BY TYPE, AND POLLUTION
FROM THE ECONOMY
In this section, each of the I3 technological change types listed in Table 1 will-be assessed as to its individual impact on the projected residuals from the total U.S. economy in the year 2000. This will be accomplished, for each technological change type, by comparing the total wastes discharged to the environment from prodution in 2000 under two technological scenarios. The first scenario employs year 2000 final demands with 1970 technology (1970 technical coefficients) to obtain a measure of pollution loadings from a technologically static economy. In the second scenario the particular technological change type under consideration is activated while all else remains the same as in the first scenario. The residuals may then be compared between the two scenarios under a constant level of pollution generation and treatment technology. Table 8 presents these comparisons for two of the 13 technological change types considered in this study, namely the substitutions of polyolefins for pulp and plastic products for steel. Notice that the substitution of polyolefins for pulp reduces total pollution loadings from the economy for all pollutants except hydrocarbons. The impact of the substitution of plastic products for steel is less dramatic. Table 9 summarizes these comparisons for all of the technological change types. FULL TECHNOLOGICAL
CHANGE
AND POLLUTION
FROM THE ECONOMY
In this final section a comparison will be made similar to those just described except that here the comparison will be made between an economy employing all technological change (input substitution) projected to occur between 1970 and 2000, and a second static economy that employs 1970 technology. The comparison will be made using year 2000 final demands and waste generation and treatment technology. 6 The results are presented in Table 10. Technological change of the input substitution variety is seen to be environmentally damaging for six pollutants. Two of these pollutants increase substantially, namely oxides of nitrogen and dissolved solids. Although not supported by the tables included in this paper, the substitutions of electric power for labor and fiberglass for glass and steel are the primary culprits. On the other hand, technological change reduces the total loadings from the economy for six pollutants also. The greatest reduction is in waste water where the substitution of knits and paper for woven goods plays an important part. Summary Technological
change as defined, and somewhat limited, by the scope of this paper has
6For a similar comparison
and 1980
for five air pollutants
(I 958 final demands) see [9].
between economies
defined on technical coefficients for 1958
88
HENRY
W. HERZOG,
JR.
been shown to affect, in many ways, the quantities and distribution of residuals generated within the U.S. economy and, after treatment, discharged to our environment. Projected technological change related to sector level unit output pollution generation and treatment
TABLE 8 Impact of Substitution of Polyolefins for Pulp on the Total Pollution Loadings from Production in the Year 2000 (Year 2000 Pollution Generation and Treatment Technology) Pollutants
Name Part HC sox co NOX Heat WW COD BOD ss DS N P
Pollution
Dimension (Bil. (Bil. (Bil. (Bil. (Bil. (lOI (Tril. (Bil. (Bil. (Bil. (Bil. (Bil. (Bil. (Tril.
Ibs.) lbs.) lbs.) Ibs.) Ibs.) Btu.) gals.) Ibs.) Ibs.) Ibs.) Ibs.) Ibs.) Ibs.) Ibs.)
loadings
No change in technology
Year 2000 technology
39.0 140.3 124.9 23.5 17.5 5.2 172.3 418.1 106.7 1555.3 194.4 38.6 15.5 13.6
38.4 140.4 124.6 22.5 17.5 5.2 170.7 418.1 103.1 1553.4 190.0 38.6 15.5 13.5
Percentage (diff/no
difference change)”
-1.52 0.07 -0.20 -3.93 -0.31 -0.6 1 -0.89 -0.01 -3.37 -0.13 -2.27 -0.01 -0.01 -0.5 1
Impact of Substitution of Plastic Products for Steel on the Total Pollution Loadings from Production in the Year 2000 (Year 2000 Pollution Generation and Treatment Technology) Pollutants
Name Part HC sox co NOX Heat Ww COD BOD ss DS N P Solid
Pollution
Dimension (Bil. (Bil. (Bil. (Bil. (Bil. (lOI (Tril. (Bil. (Bil. (Bil. (Bil. (Bil. (Bil. (Tril.
Ibs.) Ibs.) lbs.) Ibs.) Ibs.) Btu.) gals.) Ibs.) Ibs.) lbs.) Ibs.) Ibs.) Ibs.) Ibs.)
‘AU figures have been rounded. unrounded pollution loadings.
loadings
No change in technology
Year 2000 technology
39.0 140.3 124.9 23.5 17.5 5.2 172.3 418.1 106.7 1555.3 194.4 38.6 15.5 13.6
38.8 140.3 124.2 23.4 17.5 5.2 172.1 418.1 107.0 1554.9 196.0 38.6 15.5 13.6
The percentage
differences
in column
Percentage (diff/no
difference change)’
-0.58 0.03 -0.59 -0.35 0.01 -0.12 -0.10 0.00 0.26 -0.03 0.80 0.00 0.00 -0.38 3 were
computed
using
TABLE
9
Summary Table Showing the Effects of Future Input Substitution on the Tota! Pollution Loadings from Production in the Year 2000 (Year 2000 Pollution Generation and Treatment Technology) (+ = Increase, - = Decrease) Pollutants Substitution
Part
type
Plastic for glass containers Vinyl for leather Polyolefins for pulp Plastic products for steel Aluminum for steel Fiberglass for glass and steel Electric power for labor Computer services for labor Acrilan for woo! Knits and paper for woven goods Telephone for postal services Air for rail transport Aluminum for copper
HC
SOX
CO
NOX
Heat
WW
COD
BOD
SS
DS
N
P
t t t
_ t _
t t
t
t
t t _
t _ _
t t _
t t -
t t ---
t
+
t
t t
t
_
t _
t t
t -
t t --
t
-
_
t
t
_
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t t
t t
t t
t t
t t
t -
t -
+ _
t t
t t --
t
-
t
-
-
t
t
--
t
_ t
t t
-t t
t t
t t
t t
t t
t t
t
-
-
-
-
-
t
t
Solid
-
TABLE 10 The Total Impact of Technological Change on the Pollution Loadings from Production in the Year Zoo0 (Year 2000 Pollution Generation and Treatment Technology) Pollution Pollutants
Name
Dimension
Particulates
Bil. lbs.
Hydrocarbons Oxides sulfur Carbon of monoxide
Bil. lbs. Bil. lbs.
Oxides of nitrogen Waste water Chemical oxygen demand Biochemical oxygen demand=
Bil. Tril. Bi!. Bil.
Suspended solids Dissolved solids
Bil. lbs. Bil. lbs. Bil. lbs. Bil. lbs. Tril. lbs. lOI Btu.
Nitrogen Phosphorus Solid waste Heat ‘g-day.
?nsignificant.
lbs. gals. lbs. lbs.
loadings in 2000
No change in technology
Year 2000 technology
39.0 140.3 124.9 23.5 17.5 172.3 418.1 106.7 1555.3 194.4 38.6 15.5 13.6 5.2
40.6 140.6 124.8 23.5 19.4 162.0 411.0 108.7 1527.8 210.6 37.8 15.2 13.6 5.3
Percent
difference 100x (col. 2 - col. l)/col. 1 4.1 0.2 -0.; 10.9 -6.0 -1.7 1.9 -1.8 8.3 -2.1 -1.2 1.9
90
HENRY
W. HERZOG,
JR.
levels was seen to make a dramatic contribution to the reduction of nearly all pollutants under consideration. However, the paper dealt primarily, not with technology related to pollution generation and treatment, but with technology affecting the interindustry structure of the U.S. economy. Technological change defined by input substitution types was shown to differentially affect the magnitude and distribution of residuals discharge at the sector level. When these varied impacts at the input-output sector level were weighted by a year 2000 final demand vector, technological change defined by input substitution offered environmental rewards (smaller pollution levels) for 6 of the 12 pollutants that were significantly affected. The results derived from the model are certainly only as good as the data base on which it feeds, and in this respect its appetite is immense. However, the input-output structure on which the model is built is ideally structured not only to register production interactions within the economy but also to register how that relationship changes over time with partial or full doses of technological change. The addition of a submodel to measure sectoral level residuals generation and treatment allows a systematic environmental assessment of this same technological change. Studies of this nature will certainly become more and more important in the decades ahead. The author wishes to thank Resources for the Future, Inc., for much of the data used in
Reading, Massachusetts: (1967). 2. Leslie Ayres, Ivars Gutmanis, and Adele Shapanka, Environmental Implications of Technological and Economic Change far rhe United Stares, 1967-2000: An Input-Output Analysis (prepared for Resources for the Future, Inc.), International Research & Technology Corporation (June 1971). 3. R.U. Ayres, Stedman Noble, and D. Overly, Technological Change as an Explicit Factor of Economic Growth (prepared for Resources for the Future, Inc.), International Research & Technology Corporation (July 1971). 4. Anne P. Carter, Srrucrural Change in the American Economy, Harvard University Press, Cambridge, Mass. (1970). 5 Barry Commoner, The Closing Circle, Alfred Knopf, New York (I 97 I). “Application of Input-Output Techniques to the Analysis of Environmental 6. John H. Cumberland, Problems,” prepared for the Fifth International Conference on Input-Output Techniques, Geneva, January II-19,197l. “A Regional Interindustry Mode1 for the Analysis of Development Objectives,” 7. John H. Cumberland, Regional Science Association Papers, 17, 65-94 (I 966). 8. Wassily Leontief, “Environmental Repercussions and the Economic Structure: An Input-Output Approach,” Review of Economics and Statistics, LII, No. 3, pp. 262-271 (Aug. 1970). 9. Wassily Leontief, and Daniel Ford, Air Pollution and the Economic Srrucrure: Empirical Results of Inpur-Output Compurarions, Harvard University, Cambridge, Mass. (Jan. 1971) (unpublished).
Received
May
30, 1972
FORECASTING
An Environmental
AND SOCIAL
CHANGE
5, IS-90
(1973)
Assessment of Future
Production-Related Technological Change: 1970-2000 (An Input-Output Approach) HENRY
W. HERZOG,
JR. “The chief reason for the environmental crisis that has engulfed the United States in recent years is the sweeping transformation of productive technology since World War II.” -Barry Commoner, The Closing Circle
ABSTRACT This paper develops a technique, or model, to systematically assess the environmental impact of specific technological changes forecast to occur over this and the next two decades. The core of the model is a dynamic technical coefficient matrix of a large input-output model. The technological change considered is that which affects the coefficients of this matrix and thus the distribution of material inputs over time into the various sectors of the U.S. economy. An environmental assessment of this production-related technological change is achieved through a submodel that registers production residuals on an industry basis for 14waste categories.
What does the technological future hold in store for us? Will the above-mentioned “crisis” be continued in the future, or even accelerated, through the introduction of new products and production processes? As important as these questions are for the future of mankind, no definite answers are available, for we do not even possess the knowledge to assess the past, namely the intricate relationship between past technological change and today’s environment. How then can this paper proceed? It may only proceed by limiting the scope or connotation of technological change itself. Technological change can be viewed as knowledge that leads to new or improved processes or products for the satisfaction of final and intermediate demands in the economy. This study will consider technological change as it affects intermediate demands only, and will exclude the creation of new products. Thus, the results that follow should only be considered as a sample of what is likely to stem from one category of future technological change. However, the model developed below is readily adaptable to all categories. Our assessment of the technological-environmental relationship in the U.S. economy will proceed at three levels of inquiry. The first, and most detailed, is an examination of technological change at the industry level. At this level each technological change that is operative will be studied as to its individual impact on the environment. In the second level an environmental assessment is made for each type of technological change in the economy as a whole. The third level will compare the total environmental impact in the MR. HERZOG is a doctoral candidate in Economics Economic Research, University of Maryland.
and Faculty Research Assistant in the Bureau of Business and
o American
Elsevier Publishing
Company,
Inc., 1973
76
HENRY
W. HERZOG,
JR.
year 2000 of the U.S. economy with and without all projected technological change between I970 and 2000. These three levels of inquiry provide a convenient and systematic framework for the presentation of both the environmental assessment model and the results derived from it. The Technological Change-Environmental Assessment Model The model to be outlined below is essentially an input-output model of the U.S. economy with dynamic. or time-dependent. technical coefficients.’ Appended to this model is an environmental submodel. also dynamic with respect to time. that registers production related pollution generation on a gross and net of treatment basis. * Before developing the model, a quick summary of its dimensions seems warranted. The input-output model has 179 industry sectors. Most of these sectors generate at least one pollutant and several generate as many as fourteen pollutants. Technological change affects every sector but not every technical coefficient. Thirteen types of technological change were selected for this study, the selection based principally on data availability. The technological change types and the pollutants considered in this study, along with the abbreviations used throughout this paper for the latter, are listed in Table I. The specification of the model begins with the traditional input-output equations. Let y and x be n-dimensional column vectors of final demands and outputs respectively. Let A be an n-order matrix of technical coefficients atj>O, where oij is equal to the dollar purchases of industry j from industry i required per dollar of output produced in industry j. Then: Ax+y=x
(1)
and x = (I - ,4)-‘ y. Equations (I) and (2) define the static input-output system. Technological change may be entered explicitly within this system by functionally relating the technical coefficients with time. It is important to note at this juncture between the static and dynamic economy the exact change” should assume for this study. Traditional context the term “technological economic theory makes a clear-cut distinction between technological change (shifts in the production function) and technical change or input substitution (shifts along a fixed production function). Since the projected changes in the technical coefficients used in this study were derived from past trends over periods of time where both technical and technological changes were active, the projections themselves cannot be viewed as pure technological change under the traditional definition.3 By the same reasoning our projections cannot be considered free of past trends in technology diffusion.
‘The technical coefficients are those used in the Maryland Interindustry Forecasting Model. The parameters deping sectoral level technological change were obtained from [3]. Although several of these input-output environmental models have been presented in the literature, the first, to the author’s knowledge, is that described by John H. Cumberland in [7]. Also, see [6] or (81. The pollution generation and treatment coefficients used in the environmental submodel were obtained from [2]. 3For an interesting discussion of this problem see (41,
pp. 9-l I.
ENVIRONMENTAL
ASSESSMENT
OF TECHNOLOGICAL
CHANGE
77
With these definitional problems in mind the static technical coefficients of Eq. (I) and (2) may be redefined as functions of time. t, where: U;j(t) =Uij(-m) +f(k,
U,
t)[Uij
(+O”) -
Uij(-m)]
(3)
and @(r-u) f(k. U, t) = 1 + ek(r-u)
.
(4)
Thus. the current value of a technical coefficient aii(t) is equal to its historical minimum value plus a fraction of its total expected change time.4 The fraction, flk, u, t), is defined by a two-parameter logistic function. Eq. (4). that takes values with f, for any given k and u. between zero and one. The parameter u defines the year in which the technological change is half complete. The parameter k determines how rapidly the function approaches its lower and upper limits from the midpoint. If A(t) is the technical coefficient matrix of the newly defined time-dependent technical coefficients, aij(t). and B(t) is an n-order matrix. then the functional relationship that links outputs and final demands is also a function of time. Thus: x = E(r) y
(5)
where : B(t) = [I-
A(t)]-‘.
(6)
Pollution generation can be considered to stem from two primary sources, the production of goods and the use of goods. Automobiles not only create air pollution in their use-and solid waste when this usage is terminated-but also generate air, water, and solid residuals during their production. It is this latter type of waste generation, pollution from production. that will be examined with respect to future technological change in the pages that follow. In this model wastes stemming from production are tied directly to output levels. For any particular industrial sector the production-waste generation process may be considered as three distinct subprocesses. The first subprocess is the creation of the economic output itself with labor, capital, and material inputs from other sectors of the economy. Technological change of the type already defined affects the relative importance, and thus the quantities consumed, of the material inputs from other sectors. The second and third subprocesses concern the generation and treatment of the residuals stemming from production activities in the first subprocess. Technological change is also active in these latter processes and will affect the intensity of waste generation and treatment occurring there. In the discussion that follows technological change that affects the first subprocess will always be distinguished from technological change occurring in the second and third subprocesses in order to separate and assess their individual impacts. Let gip(?) be the physical amount of pollution of type p generated per million dollars of output in sector i in year r. If ep(t) is the average treatment efficiency projected for
4For a detailed account of the estimation of Eq. (3) and(4) see [3]
78
HENRY
W. HERZOG,
JR.
pollutant type p in year t, and xit is the output of sector i in the same year, then the total amount of pollution of type p discharged to the environment in year t from sector i is [ 1-
ep(41 gi, (tht.
(7)
With these definitions in mind the model can best be described at each of the three levels of inquiry mentioned above. TECHNOLOGICAL
CHANGE AND POLLUTION
AT THE INDUSTRY LEVEL
At this level of inquiry our attention will focus on the wastes created in the production processes of all industries stemming from the satisfaction of unit final demands for the products of individual industries. In order for the motor vehicles and parts sector of the economy to satisfy one million dollars of final demand for its products, it must purchase inputs from many other sectors of the economy. These sectors, in turn, require inputs from other sectors themselves. Thus, a final demand for the products of any one industry solicits output from all industries and thus the generation of waste residuals throughout the economy. Technological change affects this relationship in two ways: first through changes in the distribution of intermediate demands and second through changes in the intensity of residuals generation and treatment on a unit output basis. As already stated each warrants an environmental assessment. Let bij(t) be the i, fib element of the matrix B(S) defined in Eq. (6). Denote by BS(t) and bSij (t) the matrix and i, $h element of that matrix formed from B(t) where only s-type technological change (Table 1) is allowed to function at time t.5 In the discussion that follows the matrix B(t) or its elements written without the superscript s denote full technological change at time t. In this latter case all technological changes listed in Table 1 are active in the economy. The technical coefficients, which represent millions of dollars of inputs required per million dollars of output, are based on constant 1967 dollars, as are all other coefficients and variables in the model.
TABLE Technological
change
types:
Plastic for glass containers Vinyl for leather Polyolefins for pulp Plastic products for steel Aluminum for steel Fiberglass for glass and steel Electric power for labor Computer services for labor Acrilan for wool Knits and paper for woven goods Telephone for postal services Air for rail transport Aluminum for copper
1 Pollutants
(abbreviations):
Particulates (Part) Hydrocarbons (HC) Oxides of sulfur (SOX) Carbon monoxide (CO) Oxides of nitrogen (NOX) Waste water (WW) Chemical oxygen demand (COD) Biochemical oxygen demand* (BOD) Suspended solids (SS) Dissolved solids (DS) Nitrogen (N) Phosphorus (P) Solid waste (Solid) Heat (Heat)
*5-day
5The matrices B(r) and B’(t)for t >I967 were obtained from B( 1967) by employing the computation rules for changing the inverse of a matrix when one column or row of the matrix is changed. See [I], pp. 22, 23.
ENVIRONMENTAL
ASSESSMENT
OF TECHNOLOGICAL
19
CHANGE
The waste residuals, or pollution, of type p discharged to the environment million dollars of final demand for goods produced in sector k is equal to: type s technological change only: [ 1 - ep(t)] 2
b$ (tl) gi, (tz)
i=l
all technological
in year rper
(S = 1) 13) 0, = 1, 14);
(8)
@= 1, 141,
(9)
change:
11- e,(t)]
2 bik(tl)gip(t2)
i=l
where: (tl = t; tz = 1970): year t technical coefficients, I970 pollution generation and treatment technology; (tl = 1970; t2 = t): 1970 technical coefficients, year t pollution generation and treatment technology; (t1 = t; r2 = t): year t technical coefficients, year t pollution generation and treatment technology. TECHNOLOGICAL
CHANGE
BY TYPE,
AND
POLLUTION
FROM
THE ECONOMY
At this second level of inquiry each technological change type (Table I) will be examined as to its relative impact on the total waste loadings from the economy in the year 2000. To accomplish this a pollutant by pollutant comparison can be made among technological change types, or between any one type and a year 2000 economy with no technological change, of any type, past 1970. These comparisons will be made using the year 2000 pollution generation and treatment technology. If yit is the final demand for sector i in year t, then the total pollution of type p in the year 2000 under technological change s is: [ 1 - ep(t)]
2 gip(f) f i=l
FULL TECHNOLOGICAL
CHANGE
X&t)Yjt
j=l
AND POLLUTION
(s = 1,13) = 1,14) t = 2000.
@
(10)
FROM THE ECONOMY
At this final level of inquiry into the relationship between technological change and an assessment will be made as to the total production-related waste generation, environmental impact of input substitution that is projected to occur between 1970 and 2000. Residuals stemming from production in 2000 will be computed first using the technological knowhow that existed in 1970, and second that knowhow (input-output technical coefficients) projected for the end of this century. Both computations will use the year 2000 waste generation and treatment coefficients and sectoral final demands. For any pollutant p, the total waste load released to the environment is equal to:
[1 - e&N f
i=l
gipCt)
2 bij(t*)Yjt
j=l
(t* = I970), I970 technical coefficients, (t* = 2000), year 2000 technical coefficients
@= 1,14) t=2000
(11)
80
HENRY
W. HERZOG,
JR.
Technological Change and the Environment-an Assessment This segment of the study will consider a sampling of the results obtained under the application of the assessment model just described. It is hoped that a cursory examination of the results will increase our understanding of the dynamic nature of technological change as an interface between the physical environment and the U.S. economy. We would hope, at a minimum, to be able to identify those technological trends that, on balance, are environmentally damaging through their effects on production-related residuals generation. With this in mind we may cautiously approach the results.
TECHNOLOGICAL
CHANGE
AND POLLUTION
AT THE INDUSTRY
LEVEL
Tables 2-5 present detailed information on the relationship between technological change and residuals generation for four of the 179 industries studied. These industries, selected as a representative cross-section of the U.S. economy, are the canned and frozen foods industry, the apparel industry, the leather footwear industry, and the motor vehicles and parts industry. The pollution levels and ratios listed in these tables pertain to the residuals generated throughout the U.S. economy per one million dollars (1967) final demand for the sector under consideration. Part A of each table presents information, by pollutant, for several technological scenarios defined by input mix (technological change affecting the input-output technical coefficients) and waste generation and treatment technology. In this part of each table no distinction is made between the technological change types (Tablel) that are active in this sector; all operate at once. Part B, however, considers the individual influence of each technological change, or substitution type, that is active in the future for the sector, plus signs indicating, for a specific pollutant, that the particular substitution type causes greater pollution loads than would occur if no technological change occurred in that sector between 1970 and 2000. Negative entries indicate the opposite. These comparisons in part B of each table are made under a constant level of waste generation and treatment. Columns 24 of Table 2 (part A) show that technological change of the input substitution variety causes 1I of the 14 unit pollution loads to increase over their 1970 values on a delivery to final demand basis in the canned and frozen foods sector. Only particulate air emissions, thermal loads, and solid waste decrease. Columns 5-7 indicate the dramatic reduction in unit waste loads between 1970 and 2000 resulting from changes in pollution generation and treatment technology. These latter computations are made with the 1970 technical coefficients; thus, input substitution projected past 1970 was not allowed to operate. Columns 8-10 combine both types of future technological change. Part B of Table 2 examines technological change of the input substitution variety by substitution type and pollutant for those substitutions forecast to be active in the canned and frozen food sector between 1970 and 2000. It is seen that the substitution of plastic for glass containers in packaging causes reductions per unit delivery to final demand in particulates, oxides of sulfur and nitrogen, thermal loadings, and solid waste. Some idea of the relative impact of each type of substitution listed as active in part B may be gained through an examination of three pollutants. Columns 2-4 of part A, Table 2, indicate that technological change of the input substitution variety causes, on balance, particulates to decrease and oxides of sulfur and nitrogen to increase. A quick examination of part B of this same table reveals the dominance in these calculations of two substitution and electric power for labor. Similar types, namely plastic for glass containers conclusions can be drawn for several of the remaining pollutants.
0.974 1.005 1.018 1.004 1.014 0.297 1.000 1.000 1.007 1.000 1.035 1.000 1.000 1.000
1980 0.928 1.014 1.034 1.011 1.023 0.992 1.001 1.001 1.018 1.001 1.092 1.001 1.001 0.999
1990 0.908 1.019 1.05 1 1.016 1.038 0.989 1.001 1.001 1.024 1.001 1.120 1.001 1.001 1.000
2000
Current input mix, 1970 pollution generation and treatment technology (ratios to 1970)
0.781 0.940 0.826 0.996 0.794 1.000 1.000 1.000 0.925 0.939 0.900 0.933 0.967 0.978
1980 0.561 0.870 0.685 0.967 0.623 1.000 1.000 1.ooo 0.862 0.882 0.841 0.866 0.933 0.958
1990 0.353 0.791 0.546 0.914 0.459 1.000 1.000 1.000 0.810 0.828 0.823 0.800 0.900 0.939
2000
1970 Input mix, current pollution generation and treatment technology (ratios to 1970)
+
_ + + + +
Plastic for glass containers Electric power for labor Computer services for labor Telephone for postal services Air for rail transport +
HC +
sox
+
+ +
co
_
+ _
NOX
+ + + +
Heat
+
+
WW
Pollutants
+
+ +
COD
+ _
BOD
(B) Types of Input Substitution Taking Place Between 1970 and 2000, and Their Effects on Pollution Generation per Million Dollar (67) Delivery to Final Demand (1970 Pollution Generation and Treatment Technology) (Blank = No Change, + = Increase, - = Decrease)
95.6 43.9 83.9 15.5 18.2 15.1 441.9 271.3 117.8 1323.7 136.8 33.3 11.2 11.5
Part
(Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (10” Btu.) (Mil. gals.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Mil. Ibs.)
Part HC sox co NOX Heat WW COD BOD ss DS N P Solid
Amount in 1970
Substitution type
Dimension
Name
Pollutants
TABLE 2 Sector No. 25, Canned and Frozen Foods
(A) Pollution Loadings per Million Dollar (67) Delivery to Final Demand Under Various Technological Scenarios
Input-Output
+
+ +
SS
+
DS
0.760 0.944 0.840 1.ooo 0.806 0.997 1.001 1.000 0.930 0.939 0.929 0.933 0.967 0.978
1980
+
+ + -
N
+
+ + -
+
_ +
Solid
0.304 0.806 0.569 0.928 0.478 0.989 1.001 1.001 0.824 0.829 0.905 0.801 0.901 0.939
0.513 0.882 0.706 0.977 0.638 0.992 1.001 1.001 0.875 0.882 0.907 0.867 0.934 0.957
P
2000 1990
Current input mix, current pollution generation and treatment technology (ratios to 1970)
Electric power for labor Computer services for labor Knits and paper for woven goods Telephone for postal services Air for rail transport
type
1.022 0.999 0.993 1.064 1.014 1.011 0.932 0.936 1.016 0.943 1.014 0.933 4935 0.953
47.1 31.2 551.9 8.8 15.5 1.9 114.5 55.2 84.3 273.0 244.8 6.9 2.3 3.4
(Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (10” Btu.) (Mil. gals.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Mil. lbs.)
Part HC sox co NOX Heat WW COD BOD ss DS N P Solid
1.059 0.997 0.978 1.182 1.028 1.032 0.802 0.812 1.045 0.835 1.041 0.806 0.811 0.859
1990 1.099 0.992 0.96 1 1.312 1.041 1.055 0.656 0.671 1.078 0.712 1.070 0.66 1 0.670 0.75 1
2000 0.760 0.93 1 0.777 0.960 0.798 0.999 0.999 1.000 0.913 0.940 0.863 0.933 0.967 1.015
1980 0.505 0.862 0.598 0.911 0.631 0.998 1.000 1.000 0.834 0.884 0.779 0.866 0.934 1.031
1990 0.257 0.791 0.431 0.853 0.473 0.998 1.001 1.000 0.764 0.83 1 0.749 0.800 0.900 1.047
2000
1970 Input mix, current pollution generation and treatment technology (ratios to 1970)
+ t _ + +
+ _
_
+
HC
Part + + _ t t
sox
_ t _ _
+ _
_ t
Heat
NOX
co
+ t _ + +
WW
Pollutants
t t _ + +
COD
t _ _
_
BOD
(B) Types of Input Substitution Taking Place Between 1970 and 2000, and Their Effects on Pollution Generation per Million Dollar (67) Delivery to Final Demand (1970 Pollution Generation and Treatment Technology) (Blank = No Change, + = Increase, - = Decrease)
1980
Amount in 1970
Current input mix, 1970 pollution generation and treatment technology (ratios to 1970)
Dimension
Substitution
TABLE 3 Sector No. 39, Apparel
Loadings per Million Dollar (67) Delivery to Final Demand Under Various Technological Scenarios
Name
Pollutants
(A) Pollution
Inputautput
+ t _ + t
SS
_ + _ _
DS
0.777 0.93 1 0.772 1.023 0.809 1.010 0.932 0.936 0.93 1 0.887 0.877 0.871 0.905 0.97 1
1980
+ + _ t t
N
0.540 0.859 0.585 1.092 0.648 1.031 0.805 0.812 0.891 0.737 0.822 0.698 0.757 0.905
1990
t t
t t
P
+ +
+ t
Solid
0.294 0.785 0.4 14 1.164 0.491 1.054 0.664 0.671 0.866 0.589 0.826 0.529 0.603 0.836
2000
Current input mix, current pollution generation and treatment technology (ratios to 1970)
?
.x
8 R
3
g
3
1.168 1.095 1.089 1.160 1.064 1.142 1.053 0.988 1.202 1.011 1.295 0.988 0.988 1.084
1980
1.103
0.978
1.215 1.116 1.118 1.201 1.082 1.176 1.063 0.978 1.254 1.007 1.372 0.979
1990 1.223 1.116 1.129 1.203 1.092 1.177 1.062 0.976 1.255 1.006 1.375 0.977 0.976 1.106
2000
Current input mix, 1970 pollution generation and treatment technology (ratios to 1970)
0.76 1 0.931 0.785 0.968 0.795 0.999 1.007 1.000 0.921 0.934 0.866 0.933 0.967 1.060
1980 0.504 0.861 0.612 0.927 0.624 0.999 1.019 1.ooo 0.859 0.874 0.786 0.866 0.933 1.121
1990 0.252 0.790 0.450 0.880 0.462 0.999 1.034 1.000 0.811 0.821 0.760 0.800 0.900 1.184
2000
1970 Input mix, current pollution generation and treatment technology (ratios to 1970)
HC +
-
+
_ _
Vinyl for leather Aluminum for steel Electric power for labor Computer services for labor Telephone for postal services Air for rail transport -
+
+
sox
-
+
co
-
+
+
NOX
-
+
Heat
-
+ _
WW
Pollutants
+ + + f +
COD
_
_
+
BOD
(B) Types of Input Substitution Taking Place Between 1970 and 2000, and Their Effects on Pollution Generation per Million Dollar (67) Delivery to Final Demand (1970 Pollution Generation and Treatment Technology) (Blank = No Change, + = increase, - = Decrease)
51.3 26.9 125.9 9.9 25.7 2.0 30.8 24.4 55.2 131.0 193.1 2.9 1.0 2.0
Part
(Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (10” Btu.) (Mil. gals.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Mil. lbs.)
Part HC sox co NOX Heat ww COD BOD ss DS N P Solid
Amount in 1970
Substitution type
Dimension
Name
Pollutants
TABLE 4 Sector No. 75, Leather Footwear
(A) Pollution Loadings per Million Dollar (67) Delivery to Final Demand Under Various Technological Scenarios
Input-Output
+ + + + + +
SS
+
DS
0.887 1.018 0.855 1.117 0.847 1.141 1.065 0.988 1.095 0.943 1.115 0.922 0.955 1.152
1980
+ t + t +
N
+ + t + +
P
0.6 11 0.959 0.685 1.105 0.678 1.175 1.092 0.978 1.055 0.880 1.065 0.848 0.913 1.242
1990
t
+
Solid
0.307 0.881 0.510 1.051 0.508 1.175 1.110 0.976 0.995 0.825 1.030 0.782 0.878 1.318
2000
Current input mix, current pollution generation and treatment technology (ratios to 1970)
1990 0.607 0.868 0.767 1.008 0.622 0.999 1.054 1.000 0.829 0.852 0.766 0.866 0.933 1.237
1980 0.813 0.938 0.869 1.017 0.794 0.999 1.024 1.ooo 0.904 0.921 0.854 0.933 0.967 1.118 0.400 0.789 0.664 0.975 0.459 0.999 1.089 1.000 0.773 0.792 0.736 0.800 0.900 1.355
2000
1970 Input mix, current pollution generation and treatment technology (ratios to 1970)
_ +
_
+ + _ _
Plastic products for steel Aluminum for steel Fiberglass for glass and steel Electric power for labor Computer services for labor Telephone for postal services Air for rail transport _ t
HC
_
+
sox
+
+
co
+ + _ _
_
NOX
_
t _
Heat
+
_
_
WW
Pollutants
_ _ +
_ _ +
COD
_
+ _ + _
BOD
(B) Types of Input Substitution Taking Place Between 1970 and 2000, and Their Effects on Pollution Generation per Million Dollar (67) Delivery to Final Demand (1970 Pollution Generation and Treatment Technology) (Blank = No Change, + = Increase, - = Decrease)
1.198 1.127 0.922 0.978 1.167 1.115 0.884 1.091 1.791 0.901 2.426 1.092 1.091 0.814
1.129 1.081 0.952 0.986 1.110 1.075 0.925 1.055 1.511 0.935 1.921 1.056 1.055 0.880
1.035 1.020 1.ooo 1.003 1.038 1.021 0.987 1.015 1.118 0.988 1.207 1.015 1.015 0.978
69.1 24.3 119.8 11.7 16.5 2.4 22.7 14.2 25.8 103.6 77.3 1.6 0.5 3.8
Part
(Thous. lbs.) (Thous. Ibs.) (Thous. Ibs.) (Thous. Ibs.) (Thous. lbs.) (10” Btu.) (Mil. gals.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Thous. lbs.) (Mil. Ibs.)
Part HC sox co NOX Heat WW COD BOD ss DS N P Solid
2000
1990
1980
Current input mix, 1970 pollution generation and treatment technology (ratios to 1970)
Amount in 1970
Substitution type
Dimension
Name
Pollutants
TABLE 5 Sector No. 133, Motor Vehicles and Parts
(A) Pollution Loadings per Million Dollar (67) Delivery to Final Demand Under Various Technological Scenarios
Inputautput
+
_ _ _ +
SS
+ _ _ _
+
DS
0.838 0.957 0.865 1.016 0.825 1.020 1.010 1.015 1.004 0.912 1.027 0.947 0.981 1.093
1980
t
+
N
+
+ _
_
P
0.662 0.936 0.694 0.960 0.695 1.074 0.964 1.055 1.206 0.804 1.449 0.915 0.985 1.082
1990
_ _ _ t _ _ +
Solid
0.440 0.890 0.536 0.885 0.547 1.114 0.936 1.091 1.307 0.728 1.749 0.873 0.982 1.088
2000
Current input mix, current pollution generation and treatment technology (ratios to 1970)
?
P
8
.e
2
%
ENVIRONMENTAL
ASSESSMENT OF TECHNOLOGICAL
85
CHANGE
Tables 3-5 present companion information for the apparel, leather footwear, and motor vehicles and parts industries. It is interesting to note the relative importance of the substitution of knits and paper for woven goods in the apparel industry (Table 3), and the substitution of vinyl for leather in the leather footwear industry (Table 4). Tables 6 and 7 present, in summary fashion, the results of carrying out the calculations required for the tables just discussed over all 179 input-ouput sectors of the model. Table
TABLE 6 Summary Table Showing the Influence of Input Substitution on the Pollution Loadings per Unit Delivery to Final Demand for 179 lnput-<)utput Sectors (1970 Pollution Generation and Treatment Technology) (A) By Pollutant and Time
Number of Input-Output 1990
1980 Pollutant
Decrease
Part HC sox co NOX Heat ww COD BOD ss DS N P Solid
9 5 5 3 10 59 10 7 56 18 10 10 38
Increase
8
Sectors
169 168 172 172 174 167 118 167 170 121 1.59 167 167 139
Decrease
8 8 7 7 3 10 54 9 7 50 18 9 9 33
2000 Increase
Decrease
Increase
169 169 170 170 174 167 123 168 170 127 159 168 168 144
8 8 8 7 4 10 53 9 7 48 18 9 9 32
169 169 169 170 173 167 124 168 170 129 159 168 168 145
Percent of Input-Output 1980
Sectors
1990
2000
Pollutant
Decrease
Increase
Decrease
Increase
Decrease
Increase
Part HC sox co NOX Heat ww
4.5 5.0 2.8 2.8 1.7 5.6 33.0
94.4 93.9 96.1 96.1 97.2
COD BOD ss
5.6 3.9 31.3
DS N P Solid
10.1 5.6 5.6 21.2
4.5 4.5 3.9 3.9 1.7 5.6 30.2 5.0 3.9 27.9 10.1 5.0 5.0 18.4
94.4 94.4 95.0 95.0 97.2 93.3 68.7 93.9 95.0 70.9 88.8 93.9 93.9 80.4
4.5 4.5 4.5 3.9 2.2 5.6 29.6 5.0 3.9 26.8 10.1 5.0 5.0 17.9
94.4 94.4 94.4 95.0 96.6 93.3 69.3 93.9 95.0 72.1 88.8 93.9 93.9 81.0
93.3 65.9 93.3 95.0 67.6 88.8 93.3 93.3 77.7
23 70 0
I 9 0
for copper
0.0 100.0 ::: 0.0
50.0 100.0 9.1 81.3 0.0
50.0 100.0 1.2 7.5 0.0
0.0 100.0 13.9 87.5 0.0
50.0 100.0 11.2 4.2
0.0
Knits Acrilan andfor paper wool for woven goods Telephone Air for rail for transport postal services
0.0 0.0 100.0 98.8 3.0
0.0 58.2 0.0 67.8 4.2
0.0 10.2 0.0 98.8 3.0
52.9 0.0 100.0 18.9 4.8
0.0 30.6 100.0 96.5 6.1
Plastic products for steel Aluminum for steel Fiberglass for glass and steel Electric power for for laborlabor Computer services
0.0 100.0 0.0
100.0 100.0 0.0
0.0 100.0 0.0
100.0 100.0
0.0 100.0 0.0
NOX
co
Plastic for glass containers Viny1 for leather Polyolefins for pulp
Aluminum
7
5 2 0 0 0 0 149 63 0 0 59 76 1
0 2 0 0 66 3 109 12 1 1 15 46 1
100.0 100.0 0.0 0.0 0.0 0.0 87.1 38.2 0.0 0.0 35.8 95.0 100.0
0.0 61.3 100.0 63.7 1.3 100.0 50.0 9.1 51.5 100.0
WW
0.0 100.0 0.0
Heat
4 0 0 21 1 3 126 16 0 0 I 80 0
COD
the Percent
95.5 0.0 100.0 62.6 12.1 100.0 50.0 12.7 38.1 0.0
0.0 1.0 0.0 86.5 37.0 0.0 0.0 33.9 100.0 100.0
88.2 73.5 100.0 54.4 5.5 0.0 50.0 3.6 46.2
0.0
3Y.i 1:o 100.0 13.1 9.1 0.0 0.0 4.2 100.0
0.0
DS
5 2 0 82 0 3 107 20 1 1 21 31 0
DS
100.0 100.0 0.0
SS
4 2 0 0 1 0 148 61 0 0 56 80 1
SS
80.0 100.0 0.0
BOD
That Increase
7: 12 3 93 9 0 1 6 37 0
5 2
BOD
100.0 100.0 0.0
80.0 0.0
COD
Pollutants
Substitution,
WW
Pollutants
That Increase
Heat
Sectors
That Have Input
15 65 0
0 2 0 0 0 3 169 5 1 0 2 5 0
5 2 0 0 57 0 116 I 1 1
sox
HC
type
Part
Substitution
Telephone for postal services Air for rail transport Aluminum for copper
NOX
co
of Input-Output
Sectors
5 2 3 45 0 3 135 8 1 0
0 2 0 0 30 3 165 10 1 1
Plastic for glass containers Vinyl for leather
For Those Input-Output
0 2 0 0 10 0 169 5 1 1 2 6 0
sox
HC
Number
Part
Polyolefins for pulp Plastic products for steel Aluminum for steel Fiberglass for glass and steel Electric power for labor Computer services for labor Acrilan for wool Knits and paper for woven goods
TABLE
N
0.0 100.0 0.0 0.0 0.0 0.0 98.2 17.6 0.0 0.0 17.0 90.0 0.0
80.0 0.0 31.8 1.0 100.0 9.1 13.1 0.0 0.0 4.2 100.0 0.0
35.3 1.0 100.0 13.7 9.1 0.0 0.0 4.2 100.0 0.0
P
Solid
0 2 0 0 0 0 168 29 0 0 28 12 0
4 0 0 21 1 3 126 16 0 0 8; 0
Solid
P
80.0 0.0
N
8; 0
4 0 0 30 1 3 125 16 0 0
the Influence of Input Substitution on the Pollution Loadings per Unit Delivery to Final Demand for 179 InputOutput Sectors (1970 Pollution Generation and Treatment Technology) (B) By Pollutant and Substitution Type
Table Showing
type
Substitution
Summary
B $
< g
2
g
ENVIRONMENTAL
ASSESSMENT
OF TECHNOLOGICAL
CHANGE
87
6 shows that technological change of the input substitution variety causes a majority of the 179 sectors to increase their impact on the environment per unit delivery to final demand. The percentage is highest for oxides of nitrogen (96.6%) and lowest for waste water (69.3%). Table 7 presents similar information by pollutant and substitution type. The lower half of this table shows, for any substitution type and pollutant, the percent of those sectors receiving this substitution that cause greater pollution discharges to the environment per unit delivery to final demand. For example, 73.5% of those sectors that will substitute aluminum for steel between 1970 and 2000 will cause greater amounts of biochemical oxygen demand in the environment per unit delivery to final demand. TECHNOLOGICAL
CHANGE,
BY TYPE, AND POLLUTION
FROM THE ECONOMY
In this section, each of the I3 technological change types listed in Table 1 will-be assessed as to its individual impact on the projected residuals from the total U.S. economy in the year 2000. This will be accomplished, for each technological change type, by comparing the total wastes discharged to the environment from prodution in 2000 under two technological scenarios. The first scenario employs year 2000 final demands with 1970 technology (1970 technical coefficients) to obtain a measure of pollution loadings from a technologically static economy. In the second scenario the particular technological change type under consideration is activated while all else remains the same as in the first scenario. The residuals may then be compared between the two scenarios under a constant level of pollution generation and treatment technology. Table 8 presents these comparisons for two of the 13 technological change types considered in this study, namely the substitutions of polyolefins for pulp and plastic products for steel. Notice that the substitution of polyolefins for pulp reduces total pollution loadings from the economy for all pollutants except hydrocarbons. The impact of the substitution of plastic products for steel is less dramatic. Table 9 summarizes these comparisons for all of the technological change types. FULL TECHNOLOGICAL
CHANGE
AND POLLUTION
FROM THE ECONOMY
In this final section a comparison will be made similar to those just described except that here the comparison will be made between an economy employing all technological change (input substitution) projected to occur between 1970 and 2000, and a second static economy that employs 1970 technology. The comparison will be made using year 2000 final demands and waste generation and treatment technology. 6 The results are presented in Table 10. Technological change of the input substitution variety is seen to be environmentally damaging for six pollutants. Two of these pollutants increase substantially, namely oxides of nitrogen and dissolved solids. Although not supported by the tables included in this paper, the substitutions of electric power for labor and fiberglass for glass and steel are the primary culprits. On the other hand, technological change reduces the total loadings from the economy for six pollutants also. The greatest reduction is in waste water where the substitution of knits and paper for woven goods plays an important part. Summary Technological
change as defined, and somewhat limited, by the scope of this paper has
6For a similar comparison
and 1980
for five air pollutants
(I 958 final demands) see [9].
between economies
defined on technical coefficients for 1958
88
HENRY
W. HERZOG,
JR.
been shown to affect, in many ways, the quantities and distribution of residuals generated within the U.S. economy and, after treatment, discharged to our environment. Projected technological change related to sector level unit output pollution generation and treatment
TABLE 8 Impact of Substitution of Polyolefins for Pulp on the Total Pollution Loadings from Production in the Year 2000 (Year 2000 Pollution Generation and Treatment Technology) Pollutants
Name Part HC sox co NOX Heat WW COD BOD ss DS N P
Pollution
Dimension (Bil. (Bil. (Bil. (Bil. (Bil. (lOI (Tril. (Bil. (Bil. (Bil. (Bil. (Bil. (Bil. (Tril.
Ibs.) lbs.) lbs.) Ibs.) Ibs.) Btu.) gals.) Ibs.) Ibs.) Ibs.) Ibs.) Ibs.) Ibs.) Ibs.)
loadings
No change in technology
Year 2000 technology
39.0 140.3 124.9 23.5 17.5 5.2 172.3 418.1 106.7 1555.3 194.4 38.6 15.5 13.6
38.4 140.4 124.6 22.5 17.5 5.2 170.7 418.1 103.1 1553.4 190.0 38.6 15.5 13.5
Percentage (diff/no
difference change)”
-1.52 0.07 -0.20 -3.93 -0.31 -0.6 1 -0.89 -0.01 -3.37 -0.13 -2.27 -0.01 -0.01 -0.5 1
Impact of Substitution of Plastic Products for Steel on the Total Pollution Loadings from Production in the Year 2000 (Year 2000 Pollution Generation and Treatment Technology) Pollutants
Name Part HC sox co NOX Heat Ww COD BOD ss DS N P Solid
Pollution
Dimension (Bil. (Bil. (Bil. (Bil. (Bil. (lOI (Tril. (Bil. (Bil. (Bil. (Bil. (Bil. (Bil. (Tril.
Ibs.) Ibs.) lbs.) Ibs.) Ibs.) Btu.) gals.) Ibs.) Ibs.) lbs.) Ibs.) Ibs.) Ibs.) Ibs.)
‘AU figures have been rounded. unrounded pollution loadings.
loadings
No change in technology
Year 2000 technology
39.0 140.3 124.9 23.5 17.5 5.2 172.3 418.1 106.7 1555.3 194.4 38.6 15.5 13.6
38.8 140.3 124.2 23.4 17.5 5.2 172.1 418.1 107.0 1554.9 196.0 38.6 15.5 13.6
The percentage
differences
in column
Percentage (diff/no
difference change)’
-0.58 0.03 -0.59 -0.35 0.01 -0.12 -0.10 0.00 0.26 -0.03 0.80 0.00 0.00 -0.38 3 were
computed
using
TABLE
9
Summary Table Showing the Effects of Future Input Substitution on the Tota! Pollution Loadings from Production in the Year 2000 (Year 2000 Pollution Generation and Treatment Technology) (+ = Increase, - = Decrease) Pollutants Substitution
Part
type
Plastic for glass containers Vinyl for leather Polyolefins for pulp Plastic products for steel Aluminum for steel Fiberglass for glass and steel Electric power for labor Computer services for labor Acrilan for woo! Knits and paper for woven goods Telephone for postal services Air for rail transport Aluminum for copper
HC
SOX
CO
NOX
Heat
WW
COD
BOD
SS
DS
N
P
t t t
_ t _
t t
t
t
t t _
t _ _
t t _
t t -
t t ---
t
+
t
t t
t
_
t _
t t
t -
t t --
t
-
_
t
t
_
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t t
t t
t t
t t
t t
t -
t -
+ _
t t
t t --
t
-
t
-
-
t
t
--
t
_ t
t t
-t t
t t
t t
t t
t t
t t
t
-
-
-
-
-
t
t
Solid
-
TABLE 10 The Total Impact of Technological Change on the Pollution Loadings from Production in the Year Zoo0 (Year 2000 Pollution Generation and Treatment Technology) Pollution Pollutants
Name
Dimension
Particulates
Bil. lbs.
Hydrocarbons Oxides sulfur Carbon of monoxide
Bil. lbs. Bil. lbs.
Oxides of nitrogen Waste water Chemical oxygen demand Biochemical oxygen demand=
Bil. Tril. Bi!. Bil.
Suspended solids Dissolved solids
Bil. lbs. Bil. lbs. Bil. lbs. Bil. lbs. Tril. lbs. lOI Btu.
Nitrogen Phosphorus Solid waste Heat ‘g-day.
?nsignificant.
lbs. gals. lbs. lbs.
loadings in 2000
No change in technology
Year 2000 technology
39.0 140.3 124.9 23.5 17.5 172.3 418.1 106.7 1555.3 194.4 38.6 15.5 13.6 5.2
40.6 140.6 124.8 23.5 19.4 162.0 411.0 108.7 1527.8 210.6 37.8 15.2 13.6 5.3
Percent
difference 100x (col. 2 - col. l)/col. 1 4.1 0.2 -0.; 10.9 -6.0 -1.7 1.9 -1.8 8.3 -2.1 -1.2 1.9
90
HENRY
W. HERZOG,
JR.
levels was seen to make a dramatic contribution to the reduction of nearly all pollutants under consideration. However, the paper dealt primarily, not with technology related to pollution generation and treatment, but with technology affecting the interindustry structure of the U.S. economy. Technological change defined by input substitution types was shown to differentially affect the magnitude and distribution of residuals discharge at the sector level. When these varied impacts at the input-output sector level were weighted by a year 2000 final demand vector, technological change defined by input substitution offered environmental rewards (smaller pollution levels) for 6 of the 12 pollutants that were significantly affected. The results derived from the model are certainly only as good as the data base on which it feeds, and in this respect its appetite is immense. However, the input-output structure on which the model is built is ideally structured not only to register production interactions within the economy but also to register how that relationship changes over time with partial or full doses of technological change. The addition of a submodel to measure sectoral level residuals generation and treatment allows a systematic environmental assessment of this same technological change. Studies of this nature will certainly become more and more important in the decades ahead. The author wishes to thank Resources for the Future, Inc., for much of the data used in
Reading, Massachusetts: (1967). 2. Leslie Ayres, Ivars Gutmanis, and Adele Shapanka, Environmental Implications of Technological and Economic Change far rhe United Stares, 1967-2000: An Input-Output Analysis (prepared for Resources for the Future, Inc.), International Research & Technology Corporation (June 1971). 3. R.U. Ayres, Stedman Noble, and D. Overly, Technological Change as an Explicit Factor of Economic Growth (prepared for Resources for the Future, Inc.), International Research & Technology Corporation (July 1971). 4. Anne P. Carter, Srrucrural Change in the American Economy, Harvard University Press, Cambridge, Mass. (1970). 5 Barry Commoner, The Closing Circle, Alfred Knopf, New York (I 97 I). “Application of Input-Output Techniques to the Analysis of Environmental 6. John H. Cumberland, Problems,” prepared for the Fifth International Conference on Input-Output Techniques, Geneva, January II-19,197l. “A Regional Interindustry Mode1 for the Analysis of Development Objectives,” 7. John H. Cumberland, Regional Science Association Papers, 17, 65-94 (I 966). 8. Wassily Leontief, “Environmental Repercussions and the Economic Structure: An Input-Output Approach,” Review of Economics and Statistics, LII, No. 3, pp. 262-271 (Aug. 1970). 9. Wassily Leontief, and Daniel Ford, Air Pollution and the Economic Srrucrure: Empirical Results of Inpur-Output Compurarions, Harvard University, Cambridge, Mass. (Jan. 1971) (unpublished).
Received
May
30, 1972