An integrated IO and CGE approach to analysing changes in environmental trade balances**The research reported here is an output of Karen Turner's ESRC Climate Change Leadership Fellowship (Grant reference RES†066†27†0029). However, this research builds and draws liberally on research funded by the EPSRC through the SuperGen Marine Energy Research Consortium (Grant reference: EP/EO40136/1). We are grateful to participants at the International Input†Output Association Meeting on Managing the Environment (Seville, July 2008), the 48th Annual Meeting of the Western Regional Science Association (Napa Valley, California, February 2009) and a seminar at the University of Dundee (March 2009) for comments and useful suggestions on earlier versions of this paper. We are also grateful to two anonymous referees for their comments on the intial submission of this paper

Input†output (IO) tables and demand†driven multiplier techniques are absolutely appropriate for conventional pollution attribution (accounting) analyses as they provide all the required information on pollution embodied in intersectoral interactions and interregional trade flows. However, as a model of how the economy adjusts in response to a marginal change in activity, IO is unlikely to be appropriate as it is only a very special case of general equilibrium models. We propose an integrated IO and computable general equilibrium (CGE) approach, with CGE analysis of the impacts of a change in activity and model results used to inform an IO attribution analysis of pollution embodied in interregional trade flows before and after the change is introduced.