Input-Output Technique for Sustainable Development Analysis

• Assoc. Prof. Dr. Mohd Yusof Saari
• Dr. Muhammad Daaniyall Abd Rahman

One of the most important advantages of input-output analysis lies in its ability to capture direct and indirect impacts embodied in the vast interconnected supply chain networks. These interconnected supply chains can be examined to assess the economic, social and environmental impacts of doing business using a single comprehensive framework. Policymakers can use this framework for assessing the impacts of international trade on all three spheres of sustainability, which in turn uncovers the trade- offs between the indicators of sustainability. For example, an industry might be generating employment for the regional economy at the cost of polluting the environment. Quantifying such impacts enables policymakers to avoid second best solutions and seek win-win outcomes by understanding the overall effects and trade-offs of doing business.

Input-output analysis is an economy-wide and informative tool to deal with important practical policy issues; but they should be developed with great care and used with prudence. Thus, this course is designed to expose participants with information and skills to develop simple input-output models for sustainable development policy analysis.

The course is divided into three parts. The first part introduces the fundamental concepts and quantifications of standard input-output model. The second part extends the framework by integrating social and environmental physical indicators with monetary transactions. The last part introduces several applications and illustrates how they have been used for analyzing sustainability issues such as the socio-economic and environmental effects of international trade, and the main drivers of changing environmental pressures imposed by human activities.