THE LIFE CYCLE ENVIRONMENTAL IMPACTS OF CONSUMPTION

This paper reviews assessments of environmental impacts arising from consumption, taking into account the production and disposal of goods consumed. Assessments have mostly focused on understanding household consumption, but there is an increasing interest in understanding government consumption, as well as in the treatment of gross capital formation and trade. National economic and environmental accounts are the most frequently used data source for such studies and input-output techniques are usually applied. For many OECD countries and a few developing countries, assessments address only energy or greenhouse gas emissions. Few studies address a broader range of emissions-related environmental impacts. There is a lack of consideration for important pressures on ecosystems such as habitat change and overexploitation of fisheries and forests. In all countries, housing and food are important. In poor countries, public services can contribute substantially, while in rich countries, mobility and the consumption of manufactured goods is important. In rapidly developing economies, investments, especially in infrastructure and buildings, are important causes of environmental pressure as well. Differences in production conditions and pollution intensities across countries are substantial, so explicitly modelling the production of internationally traded goods using multi-regional input-output analysis is necessary to account correctly for the environmental impacts arising from the consumption of imported goods.