Incorporating New Technologies in EEIO Models

Round 1

Reviewer 1 Report

A general framework for evaluating the economic and environmental implications of new technologies was proposed in this research. Because it takes into account all of the economy's short-term consequences, this approach is particularly useful for assessing the environmental impacts of new products and technology.

- The author should think about more ways to measure how well the proposed methodology works.

- authors should clearly list more recent references and the importance of the proposed methodology.

- Explain why the proposed methodology is important and how it can be compared to recent research and methods.

- the research gaps and the proposed study's contribution should be explained in more detail.

- The work's limitations and its future scope are talked about.

- There should be more detail in the results and discussion.

- The section on the discussion should be conclusion, please rename it.

- The language problems in the manuscript should be fixed by the author.

Author Response

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Author Response File: Author Response.pdf

Reviewer 2 Report

General Comments

·        This is an excellent paper that provides the start of a framework for handling new technologies in a more flexible way than others.  As the authors acknowledge in the Discussion, there are still some important limitations to be addressed but expecting all of these to be accomplished in one paper is unreasonable.

·        My remarks extend the discussion and raise a few questions for further clarification.

Specific Comments

·        At several points in the paper, the issue of conversion from physical to monetary units is raised.  This would appear to be a critical issue in that, early on in the transformation of a new technology to market, prices are likely to be higher (what one might refer to as an environmental premium).  These distortions could undermine the full adoption of the new technology and might be addressed more efficiently and appropriately in a Leontief price model, a CGE model and a new wave of econometric-based modeling systems (e.g., EEEIO – econometrically extended-environmental IO).

·        Another option might be to return to Brookhaven National Lab/University of Illinois’ Center for Advanced Computation mixed unit input-output formulations.  This would become even more valuable as alternative policy options are considered for enhancing the adoption of the new technology (e.g., in the US there are ethanol mandates for gasoline used in automobiles) or various carbon tax policies (see some recent work by Zhang et al. 2019 and chapter 12 of the third edition of Miller and Blair, 2022 for references to mixed unit modeling).

·        The second important issue is timing; as the authors note, there essentially static system does not allow for alternative adoptions of the new technology/substitute products; in addition, it is likely, that these substitutes might command higher prices since scale economies (and thereby lower prices) will not be realizable in the initial stages.  Perhaps, in a future paper, they might explore alternative adoption scenarios with and without policy interventions (e.g.., US mandates for ethanol in gasoline).  The advantage of the supply-use framework is that it allows development of secondary products and it may well be that the substitutes expand (or even contract) these secondary product markets.

·        In addition, some new technologies may allow for a relatively seamless transition; when I turn on a light in my house, I have no idea whether the electricity is generated from fossil fuel, hydro, nuclear, wind or solar.  In this case, the initial supply can be integrated without little adjustments.  For many products, their use may require re-tooling of some parts of the supply chain and I am not sure how these costs/adjustments have been incorporated in the model; some might argue that the value-added components might change (especially changes in labor inputs – discussion on p. 5, line 143).  I am not sure how the currently methodology could accommodate such changes.

·        The discussion of substitution (p 9, line 217) implies that the older technologies are no longer used; is this correct?  Further, there are likely to be some synergetic innovations – i.e., more efficient machines to use less energy produced from renewable resources.  Is there any danger of rebound effects?

·        P 12 LCA, how are price effects incorporated as well as government-imposed mandates (e.g., the ethanol composition noted earlier)?

·        There has been quite some discussion in the IO literature about the need to conduct net as opposed to gross analysis; how would the authors characterize their work since it seems to be more towards the former (net) than the latter although the interventions seem to be exogenous rather than endogenous?

·        Again, I like the paper and the authors should take my comments (except those of clarification) as pointing the way for future extensions. 

References

Miller, R.E. and Blair, R.D. (2022) Input-Output Analysis: Foundations and Extensions, Cambridge, University Press.

Zhang, H. and Hewings, G.J.D. and Zheng, X. (2019) “The Effects of Carbon Taxation in China: An Analysis Based on Energy Input-Output Model in Hybrid Units” Energy Policy, 128, 223-224.

Author Response

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Author Response File: Author Response.pdf

Reviewer 3 Report

In this paper, a generalized methodology was proposed to analyze the environmental impacts of a new product being produced by multiple new technologies, which are intended to replace a product in the current economy, but with fewer associated environmental impacts (a bio-version). The authors present the method for the USEEIO model for the addition of second generation biofuels, including naphtha, jet fuel and diesel.

The authors present a good contextualization, through literature review. 

The proposed methodology is quite consistent. I consider it a good contribution to the theme. 

I only have suggestions regarding the presentation of the text, such as the correct use of the template with the standard formatting of the journal, in addition to a detailed review of the text, to check for small flaws, as in line 81, the number "0" was typed by mistake, next to the word "the".

Author Response

Please see the attachment.

Author Response File: Author Response.pdf