ABSTRACT

The dependency of emissions and resource extractions from economic development can only be understood in a deep disaggregation of the economy which allows identifying the environmentally important consumption, investment and production activities in their relation to the entire economy. So input–output modelling is essential for environmental studies. But the open static Leontief model is too simple. A system is needed that has all this and in addition endogenizes final demand, factor demand for labor and capital, substitution in final demand and factor demand and of course endogenous prices. Such a system is a macro model with a fully integrated flexible input–output system.