Economic Input−Output Life-Cycle Assessment of Trade Between Canada and the United States

With increasing trade liberalization, attempts at accounting for environmental impacts and energy use across the manufacturing supply chain are complicated by the predominance of internationally supplied resources and products. This is particularly true for Canada and the United States, the world's largest trading partners. We use an economic input-output life-cycle assessment (EIO-LCA) technique to estimate the economy-wide energy intensity and greenhouse gas (GHG) emissions intensity for 45 manufacturing and resource sectors in Canada and the United States. Overall, we find that U.S. manufacturing and resource industries are about 1.15 times as energy-intensive and 1.3 times as GHG-intensive as Canadian industries, with significant sector-specific discrepancies in energy and GHG intensity. This trend is mainly due to a greater direct reliance on fossil fuels for many U.S. industries, in addition to a highly fossil-fuel based electricity mix in the U.S. To account for these differences, we develop a 76 sector binational EIO-LCA model that implicitly considers trade in goods between Canada and the U.S. Our findings show that accounting for trade can significantly alter the results of life-cycle assessment studies, particularly for many Canadian manufacturing sectors, and the production/consumption of goods in one country often exerts significant energy- and GHG-influences on the other.