Assessing direct and embodied energy trades among national economies through Input-Output analysis.

Economic growth of modern economies is strongly connected with fossil fuels consumption, namely coal, crude oil and natural gas. Due to the rising environmental concern over the last decades confirmed by the recent international commitments taken at COP21 at the end of 2015, a massive attention has been dedicated (and still need to be dedicated) to promote a more and more efficient use of non-renewable primary energy resources and to assess overall responsibility associated to their consumption. To be able to fulfil this goal, the national economies need to account their direct primary energy consumption, which is the trade of oil, gas and coal imported by other countries, as well as their indirect consumption, defined as the oil, gas and coal embodied within the goods and services traded with other economies. In this paper, Input-Output analysis is employed to assess both direct and indirect trades of energy resources among countries. More specifically, Multi-Regional Monetary Input-Output Tables are used here as the reference to identify direct trades of primary energy among national economies, while the Leontief model is adopted to calculate embodied energy in goods and services endogenously consumed and traded. Besides its traditional application, a modified version of the Leontief model is here used to identify the source of primary energy embodied in goods and services, i.e. where the primary energy is ultimately extracted to deliver the amount of goods and services consumed by each economy as final demand. The analysis relies on the World Input-Output Database (WIOD), and it is conducted for 7 major World country aggregates, with focus on year 2011. The comparison among such obtained results could be relevant for analysts and policy makers, in order to understand the energy dependency of each country and to assess benefits of economic and energy policies.