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The incentives for supply chain collaboration to improve material efficiency in the use of steel: An analysis using input output techniques

Listed author(s):
  • Skelton, Alexandra C.H.
  • Allwood, Julian M.
Registered author(s):

    In the face of increasing demand and limited emission reduction opportunities, the steel industry will have to look beyond its process emissions to bear its share of emission reduction targets. One option is to improve material efficiency — reducing the amount of metal required to meet services. In this context, the purpose of this paper is to explore why opportunities to improve material efficiency through upstream measures such as yield improvement and lightweighting might remain underexploited by industry. Established input–output techniques are applied to the GTAP 7 multi-regional input–output model to quantify the incentives for companies in key steel-using sectors (such as property developers and automotive companies) to seek opportunities to improve material efficiency in their upstream supply chains under different short-run carbon price scenarios. Because of the underlying assumptions, the incentives are interpreted as overestimates. The principal result of the paper is that these generous estimates of the incentives for material efficiency caused by a carbon price are offset by the disincentives to material efficiency caused by labour taxes. Reliance on a carbon price alone to deliver material efficiency would therefore be misguided and additional policy interventions to support material efficiency should be considered.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0921800913000414
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    Article provided by Elsevier in its journal Ecological Economics.

    Volume (Year): 89 (2013)
    Issue (Month): C ()
    Pages: 33-42

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    Handle: RePEc:eee:ecolec:v:89:y:2013:i:c:p:33-42
    DOI: 10.1016/j.ecolecon.2013.01.021
    Contact details of provider: Web page: http://www.elsevier.com/locate/ecolecon

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    1. Bordigoni, Mathieu & Hita, Alain & Le Blanc, Gilles, 2012. "Role of embodied energy in the European manufacturing industry: Application to short-term impacts of a carbon tax," Energy Policy, Elsevier, vol. 43(C), pages 335-350.
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    6. Morgenstern, Richard D. & Ho, Mun & Shih, J.-S.Jhih-Shyang & Zhang, Xuehua, 2004. "The near-term impacts of carbon mitigation policies on manufacturing industries," Energy Policy, Elsevier, vol. 32(16), pages 1825-1841, November.
    7. Erik Dietzenbacher & Esther Velazquez, 2007. "Analysing Andalusian Virtual Water Trade in an Input-Output Framework," Regional Studies, Taylor & Francis Journals, vol. 41(2), pages 185-196.
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