Tohoku University, Japan

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Relationship Between Economic Growth and Waste
Management Dynamic Waste Input-Output Approach

• Tohoku University, Japan
• YOKOYAMA Kazuyo and KAGAWA Shigemi

Intermediate Input-Output Meetings 2006 on
Sustainability, Trade Productivity , 7 July
2006, Kyoto, Japan
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Contents

• Background and Previous study
• Objective
• Methodology
• Dynamic Waste Input Output model
• Scenario analysis
• Summery and Discussions

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Background

• The classical dynamic input-output models do not
  consider joint-output structure such as waste
  generations and joint-input structure such as
  waste recycling.

• It is very difficult to analyze the relationship
  among economic growth, environmental
  externalities, and waste treatment and recycling
  which is a crucial topic in our modern sound
  material cycle society.

Multi sector economic model Dynamic Leontief
model Hybrid approach Waste Input Output model
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Previous studies

• Dynamic Input-Output Model
• The dynamic input-output model (see
  Leontief(1953), Leontief(1970))
• The relationship between time lag of output and
  dynamic stability (see Sargan(1958),
  Leontief(1961))
• The relative stability and instability of the
  dynamic system (see Morishima(1958), Solow(1989),
  Tokoyama(1972))
• The singularity of the capital coefficient matrix
  (see Kendrick(1972), Meyer(1982))
• Generalization of the dynamic Leontief system
  (see ten Raa(1986), Duchin and Szyld(1985)).
• Waste Input-Output Model
• Waste Input Output model (see Nakamura and
  Kondo(2002))
• Environmental assessment of recycling of End of
  Life Electric Home Appliances (see Nakamura and
  Kondo(2004))
• Consumption behavior (see Takase, Kondo and
  Washizu(2006))
• Spatial extension (see Kagawa and Kondo(2005) )
• Dynamic extension (see Yokoyama(2005) )

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Objective

• To propose the dynamic waste input-output model
  considering the joint-output structure and the
  joint-input structure.
• To analyze the dependent relationship between
  capital accumulation and waste treatments and
  recycling.
• To discuss about the effect of the waste
  treatment and recycling policy on the balanced
  economic growth rate.

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Static Waste Input-Output Model
The Waste Input-Output Table describes the
interdependence between production structure and
waste treatment and recycling structure.

• The production activities and household
  consumption activities generate wastes.
  Joint-output structure
• The generated wastes are treated in waste
  treatment sectors and industrial sectors and
  converted into useful materials. Joint-input
  structure

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Static Waste Input-Output Model
Production X11
Finaldemand F1
Waste Treatment X12
Waste X21
Waste F2
Waste material X22-
Waste X21
Waste material X21-
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Static Waste Input-Output Model
Production X11
Finaldemand F1
Waste Treatment X12
Waste X21
Waste F2
Waste material X22-
Waste X21
Waste material X21-
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Static Waste Input-Output Model
Production X11
Finaldemand F1
Waste Treatment X12
Waste F2
Waste material X22-
Waste material X21-
Waste X21
Waste X21
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Static Waste Input-Output Model
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Dyanamic Waste Input-Output Model
Production X11
Finaldemand F1
Waste Treatment X12
Waste F2
Waste material X22-
Waste material X21-
Waste X21
Waste X21
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Dynamic Waste Input-Output Model
Production X11
Waste Treatment X12
Finaldemand
Capital Stock Investment
Waste material X22-
Waste F2
Waste K2
Waste material X21-
Waste X21
Waste X21
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Dynamic Waste Input-Output Model
Production X11
Waste Treatment X12
Finaldemand
Capital Stock Investment
Waste material X22-
Waste F2
Waste K2
Waste material X21-
Waste X21
Waste X21
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Dynamic Waste Input-Output Model
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Data Settings of Dynamic Waste Input-Output Table

• Waste input-output (WIO) table for Japan 2000
• 2000 Input-Output Tables for Japan
• Ministry of Internal Affairs and Communications
• Supplementary table Fixed capital matrix
• 2000 Input-Output Tables for Japan
• Ministry of Internal Affairs and Communications
• The fixed capital formation recorded in the final
  demand in a lump sum is distributed to output
  destinations to formulate the fixed capital
  matrix .
• Three types of tables are complied public,
  private and publicprivate.
• Input-Output Tables of Subdivided Construction
  Sectors
• Ministry of Land Infrastructure and Transport
• Sectors
• 434 Industrial sectors
• 13 Waste treatment sectors
• 78 types of wastes
• 32 Household wastes
• 17 business wastes
• 29 Industrial wastes

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Data Settings of Dynamic Waste Input-Output Table

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Dynamic Waste Input-Output Model Monetary based
equation
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Dynamic Waste Input-Output Model Physical based
equation
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Dynamic Waste Input-Output Model

• Non-squared matrix type WIO model

• Squared matrix type WIO model

Allocation matrix S
If we can find an optimal waste allocation
structure S, it is useful in evaluating the
dynamically efficient allocation from the point
of view of the relationship between economic
growth and waste management.
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Dynamic Waste Input-Output Model

• This dynamic model implies
• Fixed capital formation drives the industrial
  activity .
• The waste generated from discarded capital stock
  is directly related to the output level, and B is
  constant thus, the ratio of discharged waste
  related to capital stock is constant.

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Dynamic Waste Input-Output Model

• Steenge and Thissen(2005) condition holds,

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Dynamic Waste Input-Output Model
In the simple expression,
E Indecomposable and non-negative matrix
Positive dominant eigenvalue corresponding to a
positive eigenvector (see Perron-Frobenius
Theorem).
where denotes Von Neumann growth rate. For
the modern sound material cycle society, it is
very important to maximize the von Neumann growth
rate considering the resource and waste
management scenarios.
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Scenario analysis on Numerical Example

• Scenario 1
• Change of waste treatment policy
• Incineration VS Landfill
• Scenario 2
• Change of waste treatment facility
• Capital intensive type VS Labor intensive type

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Scenario 1

• Change of waste treatment policy
• Incineration VS Landfill

Incineration
Incineration0 ?1 Landfill1?0
Landfill
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Results of Scenario 1
Figure shows the relationship between balanced
growth rate and waste treatment. The more
incineration ratio increases, the bigger change
of balanced growth rate. And it converges 0.025
,which implies the change of waste treatment
policy affects the balanced growth rate.
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Scenario 2

• Change of waste treatment facility
• Capital intensive type VS Labor intensive type

Capital accumulation Capital Intensive type
1.3 Present situation 1 Labor
intensive type 0.7
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Results of Scenario 2
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Results of Scenario 2
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Results of Scenario 2
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Summery

• In focusing on the balanced growth path
  concerning capital accumulation and waste
  treatment, we explored the dependent relationship
  between economic and waste treatment activity and
  derived some fundamental implications.
• The functional relationship is useful for
  analytically discussing the long-run dependent
  relationship between waste generations and
  economic growth.
• Numerical examination based on the implications
  will make it more clear this functional
  relationship between capital and waste
  accumulation process.

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Discussions

• Capital stock
• Driving force of economic growth
• Potential secondary resources as well as
  potential wastes that will be generated in the
  future
• Depreciation ratio
• Consumption of fixed capital
• Material stock does not lose in weight.
• Monetary and Quantity accounting of capital stock
• Not only Waste generation but Recycling

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Thank you very much.

• Ecomaterial Design and Process EngineeringGraduat
  e School of Environmental StudiesTOHOKU
  University
• YOKOYAMA Kazuyo and KAGAWA Shigemi
• E-mail yokoyama_at_mail.kankyo.tohoku.ac.jp

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