Layer Analysis of CO2 Sources in the U.S. Economic Sectors Supply Chains: An Input Output Framework

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1 Layer Analysis of CO2 Sources in the U.S. Economic Sectors Supply Chains: An Input Output Framework Presenter: Gokhan Egilmez, Ph.D. Assistant Professor, Dept. of Mechanical and Industrial Engineering University of New Haven, West Haven, CT Co-authors: Mohammad Aslam, Ph.D. Candidate, UGPTI, North Dakota State University, Fargo, ND Murat Kucukvar, Asst. Professor, Dept. of Industrial Engineering, Istanbul Sehir University, Istanbul, TURKEY INFORMS, Annual Meeting

2 Why sustainability? Old story but bitter truth Climate Change T > any T in last 420,000 years Global warming is real Speed of T rise is > any in last 20,000 years Wait and see policy did not work, will never work Global warming will cause Is already causing A lot of bad things but some of them are Weather fluctuations Disastrous events Agri-food productivity loss Energy, water and land loss Eventually hit to the basic needs of a human according to Maslow s classification 2

3 Life Cycle Assessment Assess the environmental impact that goes along with the process, production, distribution and supply chain. Has been used extensively today and grown rapidly in terms of activity and interest to assessed different kind of products and sectors (Westkämper, 2000). Trace out and find the major processes involved over the life cycle of certain product by taking into account the environmental burden (Kraft & Kamieniecki, 2006) End of Life Landfill Reuse/Recyc le Raw material acquisition Cradle-to-Gate Use Production & Distribution INFORMS, Annual Meeting

4 Life Cycle Assessment Models *TBL-LCA (UCF) Eco-LCA (OSU) EIO-LCA (CMU) P-LCA (U.S. EPA) *Kucukvar, M., & Tatari, O. (2013). Towards a triple bottom-line sustainability assessment of the US construction industry. The International Journal of Life Cycle Assessment, *Egilmez, G., Kucukvar, M., & Tatari, O. (2014). Supply chain sustainability assessment of the U.S. food manufacturing sectors: A life cycle-based frontier approach, Resources Conservation and Recycling, Elsevier, Volume 82, January 2014,

5 Summary of Research Methodology 1 What are the CO2 stock sinks in the U.S. Economic Sector s Supply Chains individual layers 2 Data Collection (2011 data) and building EIO-LCA model 3 Layer analysis, results, conclusions and where to go from INFORMS, Annual Meeting

6 Economic Input Output Life Cycle Assessment (EIO-LCA) Economic Input-Output Matrix Public Datasets Transportation Sector $ Output $ Input Unit environmental output Unit economic output Furniture and Related Product Mfg. Unit environmental output Unit economic input Plastics Packaging Materials Mfg. Life Cycle Inventory Carbon Footprint Energy Use Water Footprint Solid Waste Toxic Releases Land Use Etc. other sectors Wood product mfg.

7 Layer Analysis Consists of six layers of CO2 equivalent emissions which contributed by U.S. manufacturing supply chains. Layer 1 refers to on-site emissions related to activities using natural gas and fuel combustion. The indirect CO2 equivalent emissions comes from the supply chain of U.S. manufacturing industry which is divided into different layers namely layer 2, 3, 4, 5 and 6. Analyzing emissions within the supply chain by narrowing the scope using layers help identifying 429 x 429 industries critical sectors that need reduction in CO2 equivalent emissions in order to reduce the overall emissions. INFORMS, Annual Meeting

8 Layer Analysis INFORMS, Annual Meeting

9 Layer 1 emissions - Top 10 industries Retail trade 1% 60% Animal (except poultry) slaughtering, rendering, and processing 50% Air transportation General state and local government services 40% Petroleum refineries Natural gas distribution 5% 30% Scrap 5% 20% Electric power generation, transmission, and distribution 7% Truck transportation 7% Used and secondhand goods 17% 0% INFORMS, Annual Meeting

10 Layer 2 emissions - Top 10 industries Other basic organic chemical manufacturing 60% Iron and steel mills and ferroalloy manufacturing 50% Coal mining Oil and gas extraction 40% Cattle ranching and farming Scrap 4% 5% 30% Petroleum refineries 6% 20% Natural gas distribution 8% Truck transportation 9% Electric power generation, transmission, and 11% 0% INFORMS, Annual Meeting

11 Layer 3 emissions - Top 10 industries Petrochemical manufacturing 60% Other basic organic chemical manufacturing 50% Coal mining Oil and gas extraction 4% 40% Cattle ranching and farming Petroleum refineries 4% 6% 30% Scrap 7% 20% Truck transportation 8% Natural gas distribution 9% Electric power generation, transmission, and 11% 0% INFORMS, Annual Meeting

12 Layer 4 emissions - Top 10 industries Other basic organic chemical manufacturing 60% Petrochemical manufacturing 50% Coal mining Cattle ranching and farming 4% 40% Oil and gas extraction Petroleum refineries 4% 7% 30% Scrap 7% 20% Truck transportation 8% Natural gas distribution 9% Electric power generation, transmission, and 0% INFORMS, Annual Meeting

13 Layer 5 emissions - Top 10 industries Other basic organic chemical manufacturing 60% Coal mining 50% Petrochemical manufacturing Cattle ranching and farming 4% 40% Oil and gas extraction Scrap 5% 6% 30% Petroleum refineries 7% 20% Truck transportation 8% Natural gas distribution Electric power generation, transmission, and 0% INFORMS, Annual Meeting

14 Layer 6 emissions - Top 10 industries Real estate Coal mining Motor vehicles parts manufacturing Oil and gas extraction Cattle ranching and farming Scrap Natural gas distribution Petroleum refineries Electric power generation, transmission, and Truck transportation 4% 6% 6% 8% 9% 50% 45% 40% 35% 30% 25% 20% 15% 5% 0% INFORMS, Annual Meeting

15 Overall Decomposition of CO2 emissions 1% 5% 27% 11% 54% LAYER 1 LAYER 2 LAYER 3 LAYER 4 LAYER 5 LAYER 6 INFORMS, Annual Meeting

16 Most Emitters: -In the 2 nd, 3 rd, 4 th, 5 th orders and the rest (layer 6) Overall Analysis Other basic organic chemical manufacturing 27% 16% 8% 4% 46% Iron and steel mills and ferroalloy manufacturing 35% 14% 6% 4 Coal mining 24% 1 6% 5 Oil and gas extraction 24% 1 6% 5 Layer 2 Cattle ranching and farming 26% 1 6% 5 Layer 3 Scrap 24% 16% 7% 50% Layer 4 Layer 5 Petroleum refineries 2 11% 5% 58% Layer 6 Natural gas distribution 26% 14% 6% 51% Truck transportation 2 4% 60% Electric power generation, transmission, and distribution 27% 1 6% 5 INFORMS, Annual Meeting

17 Future Research Narrowing down the analysis to the manufacturing industries only Working on other environmental impact categories Energy use Water use Land use Labor & injuries Integration with optimization frameworks Linear & nonlinear Deterministic & stochastic optimization Integration with multi-criteria decision making INFORMS, Annual Meeting

18 Thank you! Questions? Gokhan Egilmez, PhD Web: gokhanegilmez.wordpress.com INFORMS, Annual Meeting

19 References Egilmez, G., Kucukvar, M., & Tatari, O. (2013). Sustainability assessment of U.S. manufacturing sectors: an economic input output-based frontier approach. Journal of Cleaner Production, 53, doi: /j.jclepro Tarancón, M. A., del Río, P., & Callejas Albiñana, F. (2010). Assessing the influence of manufacturing sectors on electricity demand. A cross-country input-output approach. Energy Policy, 38, doi: /j.enpol Onat, N. C., Kucukvar, M., & Tatari, O. (2014). Scope-based carbon footprint analysis of U.S. residential and commercial buildings: An input output hybrid life cycle assessment approach. Building and Environment, 72, doi: /j.buildenv INFORMS, Annual Meeting