si.Rmd

title: "The energy and carbon inequality corridor for a 1.5 degree compatible and just Europe: Supplementary Information"
author:
- Ingram S. Jaccard:
    email: jaccard@pik-potsdam.de
    institute: PIK
    correspondence: no
- Peter-Paul Pichler:
    email: pichler@pik-potsdam.de
    institute: PIK
    correspondence: no
- Johannes Többen:
    email: toebben@pik-potsdam.de
    institute:
    - PIK
    - GWS
    correspondence: no
- Helga Weisz:
    email: weisz@pik-potsdam.de
    institute:
    - PIK
    - HU
    correspondence: no
institute:
- PIK: Social Metabolism and Impacts, Potsdam Institute for Climate Impact Research,
    Member of the Leibniz Association, PO Box 60 12 03, Potsdam, 14412, Germany
- HU: Department of Cultural History & Theory and Department of Social Sciences, Humboldt
    University Berlin, Unter den Linden 6, Berlin, 10117, Germany
- GWS: Gesellschaft für Wirtschaftliche Strukturforschung (GWS) mbH, Heinrichstraße
    30, 49080 Osnabrück, Germany
output:
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bibliography: references.bib
csl: ../templates/vancouver.csl
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Content: r rmarkdown::metadata$content

knitr::opts_chunk$set(
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)

if (!require("pacman")) install.packages("pacman")
pacman::p_load(tidyverse,
               janitor,
               here,
               wbstats,
               ISOcodes,
               viridis,
               hrbrthemes,
               wesanderson,
               glue,
               ggridges,
               patchwork,
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               flextable)

pal <- wes_palette("Cavalcanti1", 5, type = "discrete")
extrafont::loadfonts()

options(scipen=999)

library(here)

Supplementary Materials and Methods

In this paper our first aim was to decompose an Environmentally-Extended Multi-Regional Input-Output (EE-MRIO) model's household final demand expenditure by income quantile, and then multiply this income-stratified expenditure by 'direct and indirect supply chain' environmental intensities calculated in the EE-MRIO to estimate income-stratified national household environmental footprints. An EE-MRIO can calculate national environmental footprints from final demand expenditure. Final demand expenditure on different production sectors, in monetary units, is multiplied by 'direct and indirect supply chain' environmental intensities per production sector to calculate the environmental footprint (for one year). The 'direct and indirect supply chain' intensities per production sector estimate the total physical amount of environmental extension, whether emissions, energy use, etc., anywhere along the supply chain per monetary unit of final demand expenditure. In this way, the global amount of environmental pressure in that year is allocated to each country based on their final demand expenditure (this 'footprint' approach is also called consumption-based accounting as opposed to territorial-based accounting). The 'direct and indirect supply chain' intensities per production sector are calculated using standard EE-MRIO calculations.

The final demand expenditure, and thus the national footprint, is typically disaggregated into several final demand categories, including households, non-profits serving households, government, gross-fixed capital formation, change in inventories and valuables. To the authors' knowledge, current publicly available EE-MRIOs do not decompose their final demand expenditure by income quantile. The underlying distribution of final demand expenditure and footprint across income groups is therefore hidden. In order to decompose the EE-MRIO final demand expenditure and footprint by income quantile, a second data input is needed with information on the income/expenditure distribution. This could be a household budget survey (HBS) decomposed by income quantile or, at a more aggregate level, the national income distribution. In this paper we use:

1. EE-MRIO: EXIOBASE version3 ixi, from: https://zenodo.org/record/3583071#.XjC7kSN4wpY [accessed on 12.03.2020] [@stadler_exiobase_2018 @stadler_exiobase_2019]

2. HBS: European household budget survey from EUROSTAT, macro-data, from : https://ec.europa.eu/eurostat/web/household-budget-surveys/database [accessed on 22.05.2020] [@eurostat_database_nodate]

We discuss each of these in turn, including additional data inputs needed to complement the HBS. We then present our methodology for our results in the main paper, and data gaps and limitations. The final sub-section in 'supplementary materials and methods' presents an alternative methodology, and the final section of this supplementary information document presents supplementary results from the methodology used in the main paper and the alternative methodology. The whole analysis was performed in RStudio [@r_core_team_r:_2020], using a variety of R packages [@wickham_welcome_2019 @firke_janitor:_2021 @muller_here:_2020 @piburn_wbstats:_2020 @buchta_isocodes:_2020 @garnier_viridis:_2018 @rudis_hrbrthemes:_2020 @ram_wesanderson:_2018 @hester_glue:_2020 @wilke_ggridges:_2021 @pedersen_patchwork:_2020 @zhu_kableextra:_2020 @wickham_readxl:_2019 @gohel_flextable:_2021 @south_rworldmap:_2016 @arnold_ggthemes:_2021].

EXIOBASE

We use standard input-output calculations to calculate 'direct and indirect supply chain' intensity vectors in EXIOBASE [@miller_input-output_1985]. EXIOBASE publishes the A matrix, the final demand matrix, the satellite extensions matrix, and satellite extensions direct from final demand matrix. We use the industry-by-industry (ixi) EXIOBASE data tables from EXIOBASE version3. This means 163 industry production sectors and 6 final demand categories for 49 regions worldwide (44 countries and 5 rest-of-world regions), from 1995 - 2016. All monetary units are in million current Euros. Stadler et al. (2018) @stadler_exiobase_2018 describe the EXIOBASE version3 compilation procedure in detail, including nine supporting information documents with further detailed information on the compilation of the monetary tables (S1), energy (S2), emissions (S3), and others.

For each year, we first load the A matrix and calculate the Leontief inverse (the inverse of the A matrix). We load the final demand matrix and calculate total output (x) by pre-multiplying the Leontief inverse (L) by the row sums of the final demand matrix (Y):

x = L ° sum(Y)

We then load the satellite extensions matrix and extract the relevant extensions. To calculate direct intensity vectors (DIV) we divide the satellite extension vectors (f) by total output (x):

DIV = f/x

The 'direct and indirect supply chain' intensity vectors (TIV) are calculated by pre-multiplying the direct intensity vectors (DIV) by the Leontief inverse (L):

TIV = DIV ° L

The footprint is then calculated by row-wise multiplying the TIV by final demand:

fp = TIV * Y

Before that final step, however, we decompose national household final demand expenditure by income quintile according to the structure of the EUROSTAT household budget survey, explained in the 'EUROSTAT HBS' section below.

The results in the main paper also present the footprint broken down by its domestic, other European, and non-European parts. To calculate these domestic and foreign parts of the footprint, we row-wise multiply the direct intensity vectors (DIV) by the Leontief inverse (L):

TIV breakdown = DIV * L

Environmental extensions

The environmental extensions we use are emissions of CO2-equivalence (in kilograms) and gross total energy use (in terajoules). We create the CO2-equivalence extension by summing together the greenhouse gases CO2, CH4, N2O, SF6, HFCs, and PFCs, from combustion, noncombustion, agriculture and waste. We use Global Warming Potential (GWP) values for a 100-year time horizon taken from the IPCC Fifth Assessment Report [@myhre_g._anthropogenic_2013 (p.73-79)]: 28 for CH4, 265 for N2O and 23500 for SF6 (HFCs and PFCs are in CO2-equivalence already in the EXIOBASE environmental extensions).

The 'gross total energy use' extension in EXIOBASE converts final energy consumption in the IEA energy balance data from the territorial to residence principle following SEEA energy accounting principles. In their Supporting Information 2, Stadler et al. (2018) @stadler_exiobase_2018 describe the compilation of the energy extensions in EXIOBASE version3. Energy supply and use tables from the International Energy Agency (IEA) are converted from the territory to the residence principle, before being allocated to the EXIOBASE industries and final demand categories.

The conversion to the residence principle means that the EXIOBASE energy extensions refer to the functional border of a country's economy. In this case, the system border is defined by the 'residence' of the agent. This means that energy supply and use from international transport by ships, airplanes, fishing vessels, cars and trucks are allocated to the resident units of a country, independent from where these activities take place. In EXIOBASE version3, because emissions from these transport activities are estimated from the energy extensions via emission factors, the emissions extensions follow the residence principle as well.

Environmental extensions direct from households

For CO2-equivalence emissions and energy use direct from households, the EXIOBASE extensions provide one number of physical emissions and energy use direct from households per country. This number is made up of some mix between, primarily, direct household vehicle fuel use and direct household fuel use for housing heating and cooling, along with some other, smaller miscellaneous uses. To estimate the split between these three activities, we use two further EUROSTAT emissions and energy tables to split 'Total activities by households' between heating/cooling (HH_HEAT), transport activities (HH_TRA), and other (HH_OTH). Full definitions of what is included in these can be found in EUROSTAT's 'manual for air emissions accounts' (2015, p.66) @eurostat_manual_2015. While this disaggregation exists for nearly all EUROSTAT HBS countries, 2015 is the earliest year in our sample with complete coverage (except for Turkey in energy, which we impute using the Bulgarian splits). Therefore, we also use the 2015 splits between these 3 categories for our 2005 and 2010 estimates (the 2005 and 2010 results are shown only in this SI document). The two data tables are:

1. For energy, the EUROSTAT data table 'Energy supply and use by NACE Rev. 2 activity' [env_ac_pefasu] at: http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=env_ac_pefasu [accessed on 03.06.2020]. [@eurostat_eurostat_2020]

2. For emissions to air, we download the EUROSTAT data table 'Air emissions accounts by NACE Rev. 2 activity' [env_ac_ainah_r2] at: https://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=env_ac_ainah_r2&lang=en [accessed on 03.06.2020]. [@eurostat_eurostat_nodate]

EUROSTAT HBS