www.isa.org.usyd.edu.au
The University of SydneyAUSTRALIA
The University of SydneyAUSTRALIA
Manfred Lenzen
Barney Foran
Christopher Dey
Balancing Act A triple bottom line account of the Australian
economy
What is Balancing Act ?
It is a complete life-cycle assessmentof Australia’s industry sectorsacross 10 sustainability indicators.
Why is Balancing Act new / special ?
people
profit
planet
Economic:
• profits
• imports
• taxes and subsidies
Environmental:
• energy & greenhouse
• material flow
• water & biodiversity
Social:
• employment
• health and safety
• income
A Global Reporting Framework
The Triple Bottom Line -
There are some problems with the GRI’s approach
to the TBL .
1: Investors need meaningful company benchmarks
Water service provider
A
Pumping
Catchment
Water service provider
B
Pumping
Catchment
C
D
2: Policy makerswant to avoid loopholes in legislation
Dairy farming
Transport
Dairy processing
AWater con-sumption
98%
<0.1%
2%
Dairy farming
Transport
Dairy processing
A 1
A 2
3: Producersneed incentives for improving performance
Dairy processing
B
Alum. / HDPE
Packaging
X
Bio-plastic
Packaging
Dairy processing
B
Y
4: Insurersneed to see hidden risks, eg. carbon taxation
Construction Pty
C
On-site emissions
Embodied emissions
from materials
Water supplier Pty
D
On-site emissions
Lower embodied emissions from
materials
Balancing Act showshow to solve the boundary problem.
It is therefore relevant toinvestors, policy makers, producers and
insurers.
How does Balancing Actsolve the boundary
problem?
FRGESFRGESFRGESFRGESFRGES
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FRGESFRGESFRGESFRGESFRGES
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FRGESFRGESFRGESFRGESFRGES
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FRGESFRGESFRGESFRGESFRGES
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4
3
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F R G E SF R G E S F R G E S F R G E S F R G E S 2
Aluminium for use
Food Resources EnergyGoods Services
0
1
Shipping of bauxite to smelter
Manufacture of ship
Iron ore for steel
Energy foriron ore mining
Steel for ship
It looks at the whole supply chain.
Integrating
National Input-Output Tables
Structure and function and knock-
on effects
Physicaldata
The maths behind the model
Into domestic production Into domestic final
demand International exports
Total output
1 2 3 4 5 6 7 8 1 2 3 4 5 6 7 8 1 2 3 4 5 6 7 8
1…n 1…n 1…n 1…n 1…n 1…n 1…n 1…n 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
1 1 n
2 1 n
3 1 n
4 1 n
5 1 n
6 1 n
7 1 n
Out
of
dom
esti
c pr
oduc
tion
8 1 n
Domestic inter-industry transactions
trs
ij
)(
)( = industrial flow from
sector (i) in region (r) to sector (j) in region (s).
Domestic final uses
frs
i
)(
)(= final demand
of region (s) for the output of sector (i) in region (r).
International exports
err
i
)(
)(= international
exports out of sector (i) in region (r).
[ 0)()(
)(sre
rs
i]
Gross State
Output of industrial
sectors
Xr
i
)(
)(
1 1
2 1
3 1
4 1
5 1
6 1
7 1
Val
ue a
dded
8 1
Domestic primary inputs to domestic production
prs
j
)(
)(= primary inputs from
region (r) into sector (j) in region (s).
Domestic primary inputs into domestic
final uses
prs
f
)(
= primary
inputs from region (r) into final demand of region (s).
International exports of domestic
primary inputs
prr
e
)(= international
exports of primary inputs from region (r).
[ 0)()(
srprs
e]
Gross State
Production
Pr)(
1 1
2 1
3 1
4 1
5 1
6 1
7 1
Inte
rnat
ion
al
imp
orts
8 1
International imports
mss
j
)(
)( = international
imports into sector (j) in region (s).
[ 0)()(
)(srm
rs
j]
International imports into
domestic final uses
mrr
f
)(= international
imports into final demand in region (r).
[ 0)()( srm
rs
f]
International re-exports
mrr
e
)(= international
re-exports in region (r).
[ 0)()( srm
rs
e]
Intern. state
imports
Mr )(
Total input
Gross State Input into industrial sectors
Xs
j
)(
)(
Gross State Expenditure
Fs)(
Intern. state exports
Es)(
What did Balancing Actcome up with ?
Financial Indicators per dollar of final demand
Import penetration:19 cents per dollar
Export propensity :16 cents per dollar
Operating surplus:38 cents per dollar
Social Indicators per dollar of final demand
Employment: 1.75 minutes per dollar
Income: 34 cents per dollar
Government Revenue:21 cents per dollar
Environmental Indicators per dollar of final demand
Greenhouse emissions: 1.02 kg per dollar
Energy use: 7.65 MJ per dollar
Water use: 41 litres per dollar
Land disturbance: 3.2 sq metres per dollar
Wheat and Other Grains
Wheat & other grains
0.1
1.
10.Employment
Income
Land disturbance
Water use
Primary energy
GHG emissions
Gross operating surplus
Imports
Exports
Government revenue
Production layers
0.1
1.
10.Employment
Income
Land disturbance
Water use
Primary energy
GHG emissions
Gross operating surplus
Imports
Exports
Government revenue
0.0
0.5
1.0
1.5
2.0
2.5
Employment (min)
Wheat & other grains
rem321dir
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
Income ($)
Wheat & other grains
rem321dir
0.0
0.2
0.4
0.6
0.8
1.0
1.2
GHG emissions (kg CO2-e)
Wheat & other grains
rem321dir
Wh 0.687 (0; 67.%)El Wh 0.0234 (1; 2.3%)Ch Wh 0.0173 (1; 1.7%)Fo Wh 0.0114 (1; 1.1%)Sc Cg Wh 0.00936 (2; 0.91%)Fe Wh 0.00925 (1; 0.9%)Wt Wh 0.00874 (1; 0.85%)Rd Wh 0.00853 (1; 0.83%)El Rf Wh 0.00487 (2; 0.47%)Rf Wh 0.00485 (1; 0.47%)Oi Fo Wh 0.00343 (2; 0.33%)El Wt Wh 0.00263 (2; 0.25%)El Ch Wh 0.00261 (2; 0.25%)El St Wh 0.00259 (2; 0.25%)Fr Sc Cg Wh 0.0022 (3; 0.21%)Ap Wh 0.00165 (1; 0.16%)Bc Mp Ho Wh 0.00162 (3; 0.16%)
GHG emissions (kg CO2-e/$)
Structural path analysis
Black coal
0.1
1.
10.Employment
Income
Land disturbance
Water use
Primary energy
GHG emissions
Gross operating surplus
Imports
Exports
Government revenue
Black Coal
Sector: Dairy Products
0.1
1.
10.Employment
Income
Land disturbance
Water use
Primary energy
GHG emissions
Gross operating surplus
Imports
Exports
Government revenue
Alumina
0.1
1.
10.Employment
Income
Land disturbance
Water use
Primary energy
GHG emissions
Gross operating surplus
Imports
Exports
Government revenue
Aluminium
0.1
1.
10.Employment
Income
Land disturbance
Water use
Primary energy
GHG emissions
Gross operating surplus
Imports
Exports
Government revenue
Alumina and Aluminium
Motor vehicles and parts
0.1
1.
10.Employment
Income
Land disturbance
Water use
Primary energy
GHG emissions
Gross operating surplus
Imports
Exports
Government revenue
Motor Vehicles and Parts
Electricity supply
0.1
1.
10.Employment
Income
Land disturbance
Water use
Primary energy
GHG emissions
Gross operating surplus
Imports
Exports
Government revenue
Electricity Supply
0.1
1.
10.Employment
Income
Land disturbance
Water use
Primary energy
GHG emissions
Gross operating surplus
Imports
Exports
Government revenue
Banking
Spin-off 1 :
The BL3 softwarefor businesses
Spin-off 2 :
Detailedsustainability analysis
for business and industry- Example: Aluminium
FUNCTIONAL UNIT
?
detailed on-site audit
complete supply-chain analysis
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•••
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3
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F R G E SF R G E S F R G E S F R G E S F R G E S 2
Aluminium for use
Food Resources EnergyGoods Services
0
1
Shipping to smelter
Manufacture of ship
Iron ore for steel
Energy foriron ore mining
Steel for ship
Example: Australian aluminium
Electricity> Al> exports 46.57 PJ (46.29%)Alumina> Al> exports 14.48 PJ (14.39%)Al> exports 8.24 PJ (8.19%)Electricity> Alumina> Al> exports 1.40 PJ (1.39%)Electricity> Al> stocks 0.78 PJ (0.78%)Petroleum and coal products> Al> exports 0.40 PJ (0.40%)Electricity> Bauxite> Alumina> Al> exports 0.34 PJ (0.34%)Bauxite> Alumina> Al> exports 0.29 PJ (0.29%)Iron and steel> Al> exports 0.26 PJ (0.26%)Alumina> Al> stocks 0.24 PJ (0.24%)
10 top upstream paths: energy use
Sector: Aluminium Indicator: PRIMARY ENERGY
agr min food manuf u,t,c t&c f&b serv
households government capital exports stocks
5
4
3
2
1
Al> exports 959,672 t (74.2%)Al> stocks 16,089 t (1.24%)Al> electrical equipm.> construction> investm. 4,514 t (0.3%)Al> electrical equipm.> exports 4,106 t (0.3%)Al> sheet metal> investment 2,963 t (0.2%)Al> basic iron and steel> exports 2,532 t (0.2%)Al> sheet metal> beverages> households 2,144 t (0.2%)Al> electrical equipm.> households 1,891 t (0.1%)Al> electrical equipm.> investment 1,496 t (0.1%)Al> medical,photogr.& scientif.equipm.>exports 1,437 t (0.1%)
10 top downstream paths: aluminium use
Sector: economy Indicator: Aluminium tonnage
agr min food manuf u,t,c t&c f&b serv
households government capital exports stocks
5
4
3
2
1
Spin-off 3 :
The Australian
Triple Bottom Line Atlas
Total energy requirement (GJ/cap)
Energy intensity (MJ/A$)
… and a whole continent.
Covering the full supply chain …
Spin-off 4 :
Environmental Impact Assessment
Wind turbine Solar tower Solar trough Parabolic dish
Embodied
Convent. method 20 kg/kWhel 30 kg/kWhel 30 kg/kWhel 20 kg/kWhel
emissions Holistic method 50 kg/kWhel 70 kg/kWhel 90 kg/kWhel 40 kg/kWhel
Emissions embodied in renewable energy technology
Wind turbine Solar tower Solar trough Parabolic dish
Embodied
Convent. method 20 kg/kWhel 30 kg/kWhel 30 kg/kWhel 20 kg/kWhel
emissions Holistic method 50 kg/kWhel 70 kg/kWhel 90 kg/kWhel 40 kg/kWhel
Emissions embodied in renewable energy technology
Where from here ?
• Interlink time and space• Multi-regional time series
The Next Generation in
Science
Growth in Greenhouse Gas Emissions since 1970
ACCELERATORS:
Population growth +1.1%
Economic growth +1.5%
Industrial structure +1.0%
Export volume +0.8%
Residential energy mix +0.1%
RETARDANTS:
Energy intensity of industry -1.3%
Fuel mix -0.3%
Final demand mix -0.2%
Destination of final demand -0.2%
Export mix -0.1%
Richard Wood
University of Sydney
plus 4.5% /year
minus 2.1% /year
2.3%
Spatial impact modelling using GIS
Complex TBL AccountingWhich Way Forward ?
www.bottomline3.com
www.isa.org.usyd.edu.au
For further info . . .
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