When do allocations and constructs respect material, energy, financial, and production balances in LCA and EEIO?

Abstract

Conservation of mass and energy are essential to physical accounting, just as price and market balances are essential to economic accounting. These principles guide data collection and inventory compilation in industrial ecology. The resulting balanced surveys, however, can rarely be used directly for life cycle assessment (LCA) or environmentally extended input‐output (EEIO) analysis; some modeling is necessary to recast coproductions by multifunctional activities as monofunctional unit processes (a.k.a. Leontief production functions or technical “recipes”). This modeling is done with allocations in LCA and constructs in input‐output. In this article, we ask how these models respect or perturb the balances of the original inventory. Which allocations or constructs, applied to what type of data set, have the potential to simultaneously respect its multiple physical, financial, and market balances? Our analysis builds upon the recent harmonization of allocations and constructs and the ongoing development of multilayered supply and use inventory tables. We derive the necessary and sufficient conditions for balanced models, investigate the role of data aggregation, and clarify these models' relation to system expansion. We find that none of the modeling families in LCA and EEIO are balanced in general, but special data characteristics can allow for the respect of multiple balances. An analysis of these special cases allows for clear guidance for data compilation and methods integration.