Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.
4 Material Flows Accounting: Uses and Usefulness Material flows databases and analyses are already well established in a variety of U.S. government agencies. Material flows analy- ses at the plant, corporate, and national levels are also being done by private organizations. However, primarily because formal material flows accounts are not established in the United States, the value of mate- rial flows accounting is not widely recognized. The following discussion highlights the current or potential value of material flows data and accounting, as well as the need to better under- stand material flows in a global society that progressively uses more ma- terials. The examples discussed in this chapter are not intended to be in- clusive but are intended to show the range for activities in government and private industry. While it may seem obvious that good material flows analyses are de- pendent on quality data being captured and maintained in material flows accounts, the role for formal material flows accounts must still be clearly defined, as must the level of disaggregation necessary if the accounts are to properly serve the needs of society. The issue of disaggregation was addressed by the U.S. Interagency Working Group on Industrial Ecology, Material and Energy Flow (2000, pp. 78-79), as follows: National-level information is useful for an overview and a sense of the trends, problems and opportunities in materials and energy flows. Infor- mation needed to support decision-making is most useful when disag- gregated to a regional, local, industry sector or enterprise level. This level of detail in the gathering and analysis of data can be expensive but is 39
40 MATERIALS COUNT necessary to support informed decisions and more efficient use of en- ergy and materials with less environmental degradation. The reality is that the benefits of a problem- or issue-specific material flows analysis appear to be much better documented than the benefits of formal material flows accounts, especially at the national level. This chap- ter therefore takes a more structured look at typical uses of material flows accounting and analysis, with a focus on the value of formal accounts. What emerges is a need, not for expansive new data collection programs, but for the development of a carefully structured material flows account- ing framework that can accept and integrate existing and future data streams. MATERIAL FLOWS INFORMATION IN THE PRIVATE SECTOR Material flows tracking, rather than accounting, is used, or could be used, in the private sector for various purposes, ranging from simple plant-level mass balance approaches to improve materials efficiency or set corporate strategies on investment and emissions, to more complex assessments of the availability of critical resources or manufactured in- puts at a national and even international scale. Material flows information can also be used to better understand the material makeup of products and related flows, especially for recycling and reuse. Examples of mate- rial flows tracking in the private sector, are discussed below. Two consis- tent themes emerge from this information: (1) materials flows accounts should be based on systems thinking, whether the system is small or large; and (2) the availability of reliable data is very important, irrespective of whether the focus is on narrow corporate concerns, an entire sector, or national and international flows. DuPont DuPont uses material flows tracking and analyses to assess materials effectiveness in the sense of the relationship of mass and/or energy in- puts to functional effectiveness and materials efficiency (I. Carberry, DuPont, personal communication, 2002~. Material flows tracking is also used to follow the recycling of durable materials, especially steel, lead, and aluminum, and to improve the utilization of all materials, where waste from other processes, companies, or industries might become the raw material for a process of interest. A particularly notable aspect of material flows tracking at the corpo- rate and international level is DuPont's assessment of its dependence on specific suppliers for critical inputs and its consequent vulnerability to
MATERIAL FLOWS ACCOUNTING: USES AND USEFULNESS 41 disruptions in the supply chain. On one occasion, the company's entire U.S. production process would have been stopped after a catastrophic accident that destroyed the facilities of the sole international supplier of a critical input. Fortunately, DuPont had already identified its material flows dependence and developed an alternative formulation that could be brought into production quickly. This kind of highly quantitative information is valuable from an in- dustry perspective, but its application to societal materials flows analysis may be limited. Perhaps its leading contribution would be to point to the potential value of a limited amount of valid, appropriate data as the basis for good analysis and action (I. Carberry, DuPont, personal communica- tion, 2002~. Alcoa Alcoa maintains an extensive, on-line, real-time system to track per- formance data, from which baselines are established and targets set at both the local and the corporate levels (P. Atkins, Alcoa, personal commu- nication, 2002~. Equally critical is the need to look for more efficient ways to use aluminum, other materials, and energy throughout the life cycle, with greater emphasis on recycling (P. Atkins, Alcoa, personal communi- cation, 2002~. Life-cycle assessment (Sidebar 4.1) is therefore an important tool that can give holistic, quantitative summaries of environmental per- formance in terms of resources consumed and emissions to the environ- ment, considering the entire value chain (i.e., supply, production, cus- tomers, product use, and recycling). From the industry's perspective, it must create a better process for valuing natural resources, improve the integration of life-cycle assessment and material flows approaches, improve statistics on recycled materials, and seek worldwide integration of data (P. Atkins, Alcoa, personal com- munications, 2002~. Accordingly, in 2001, the International Aluminum In- stitute set the goal of performing a comprehensive, peer-reviewed, world- wide inventory on all significant air emissions, resource consumption, waste generation, and water pollutants associated with primary and sec- ondary aluminum. Vulcan Materials Company Vulcan Materials Company is an example of a private company that has developed and maintains an in-house material flows database at both regional and national levels (D. Meyer, Vulcan Materials Company, per- sonal communication, 2002~. The database, which tracks aggregate and cement operations in the United States for the last three decades, is be-
42 MATERIALS COUNT coming increasing more important as the aggregates industry evolves from a primarily local, truck-dominated industry to a multimode (i.e., rail and water), regional, and even multinational industry. The company's database contains a large amount of information, in- cluding the number of quarries and companies and their production lev- els. By considering the production in a geographical area relative to mar- ket demand, Vulcan Materials Company can determine where there are deficits, balances, or surpluses in production (D. Meyer, Vulcan Materials Company, personal communication, 2002~. For example, within the last 20 years, the number of balanced counties (i.e., where the demand for aggregates roughly equals the rate of aggregate production within the county) dropped by approximately 50 percent. Of the 3,073 counties tracked in the database, only 195 went from a balanced state to a surplus, while 482 counties went from a balanced state to a deficit (Figure 4.1~. Moreover, aggregates are now being imported to the East Coast from Canada and the Caribbean a remarkable development given the sup- posed abundance and relative low cost of this critical building and con- struction material.
MATERIAL FLOWS ACCOUNTING: USES AND USEFULNESS 43 1981 2001 FIGURE 4.1 Determination of counties in which there are deficits in production (black), balances (white), or surpluses (grey). During the last 20 years, the number of counties in which the demand for aggregates equaled the output within the county dropped by 50 percent. SOURCE: D. Meyer, Vulcan Materials Company, personal communication, 2002. Copyright permission granted by Vulcan Materi- als Company.
44 MATERIALS COUNT This is an excellent example of the value of a material flows database; it has strategic implications for optimizing resource processing and use options, for optimizing delivery and therefore transportation-related en- ergy use and emissions, for private investment decisions, and for estimat- ing municipal and regional building costs. The value of the database is particularly notable in light of the enormous growth in the importance of sand, gravel, and aggregates relative to other material flows as depicted in Figure 1.1. Recycling Industries The Institute of Scrap Recycling Industries is a private, for-profit re- cycling group consisting of approximately 1,300 companies, with a pri- mary interest in material flows accounting for waste streams. Noranda, one of the world's largest producers of zinc and nickel and a significant producer of other metals, is a major recycler of copper, nickel, and other precious metals. Both organizations have specific insights regarding the value of material flows accounting, as well as concerns about its imple- mentation. The Institute of Scrap Recycling Industries believes that by tracking the types and quantities of materials that end up in landfills, it may be possible to use these materials at a later date, thereby providing major public benefits such as reducing landfill disposal and offsetting demand for virgin materials (T. Tyler, Institute of Scrap Recycling Industries, per- sonal communications, 2002~. Such tracking and targeting of materials for recycling could be a long-term benefit of material flows accounting. General data are available on what materials on average are consistent with class IV landfills (i.e., those landfills deemed to have limited envi- ronmental impact). Getting accurate measurements of materials in any particular class IV landfill would be difficult, costly, and time consuming. However, obtaining this information from a commercial landfill (i.e., those landfills handling commercial, industrial, and construction wastes) might be less difficult, costly and time consuming. Segregation of discarded waste materials is an important consideration. Using materials from land- fills would be challenging because of potential contamination issues, and the cost of recovering the materials and then recapping the landfill might be prohibitive. However, the cost of segregating materials at landfills will have to be considered in relation to the ultimate benefits for society. The committee notes that it is difficult to find accurate recycling data, espe- cially from smaller companies. Recycling often involves complex mixes of materials, some with sig- nificant potential impacts on the environment and public health. For ex- ample, there are approximately 250 million mercury switches in U.S. ve-
MATERIAL FLOWS ACCOUNTING: USES AND USEFULNESS 45 hicles (Institute of Scrap Recycling Industries, 2001~. Used to turn on con- venience lights in trunks and hoods, each switch is about the size of a dime and contains about 1 gram of mercury. The problem arises because the small size of the switches precludes their easy removal during scrap processing, while the sheer number of switches represents a significant environmental risk. Material flows accounting could prove useful in un- derstanding the extent of a serious, impending environmental impact and also provide insight into how complex the problem will be to deal with effectively. Recyclers also have difficulty keeping up with rapidly changing mar- kets. For example, some packaging such as the aseptic packaging used for juice boxes, which is relatively new to the market, cannot be recycled eco- nomically. For these and other reasons, the Institute of Scrap Recycling Industries believes that the collection of accurate recycling data is impera- tive given the important role that recycling plays in today's economy, and its even greater role in the future as sustainability issues are addressed (T. Tyler, Institute of Scrap Recycling Industries, personal communica- tion, 2002~. It is notable that the Japanese, in framing their approach to material flows accounting, decided that recycling would be tracked. In contrast, the European Union has decided not to track recycling data in a major way; rather, it has proposed the use of subaccounts as data become available. In 1984, Noranda Inc. began processing small amounts of electronic scrap and by 1999, had the largest electronic recycling plant in North America (Reid, 1999; USGS, 2001~. Recycled materials are considered an important feedstock for its smelters (Sidebar 4.2~. For Noranda, recycling is not limited by technology or by the demand for recycled materials, but by the supply of recycled materials and competition with primary metals; and thus, the accounting of recyclable materials will play an ever-increas- ing role for companies such as Noranda. Noranda embraces the use of material flows approaches to improve product design, and to facilitate technological innovation so as to increase the efficiency of resource use, to better manage waste, and to make more effective policy decisions (L. Surges, Noranda, Canada, personal commu- nication, 2002~. However, it cites two basic issues that have to be ad- dressed the potential scarcity of materials and the environmental im- pacts of processes, uses, and disposal of materials and would like to see further efforts to develop consistent standardized information for account- ing of resources and the impact of resource use. In the company's view, there are a number of complications that must be considered in develop- ing an effective material flows accounting system. Stocks and flows must be considered, but some relevant stocks are difficult to quantify while others are unknown (e.g., the amount of recoverable copper in an auto-
46 MATERIALS COUNT
MATERIAL FLOWS ACCOUNTING: USES AND USEFULNESS 47 mobile salvage yard). Natural sources, sinks, and fluxes, as well as im- ports, exports, and inventory changes, must be quantified to place stocks and flows in context. Materials sent for disposal in landfills may or may not be recycled in the future and may or may not represent a permanent loss from the materials system; thus, such material flows should not nec- essarily be considered releases to the environment, but rather in many cases an augmentation of stocks of materials. This last point relates to the role of recycling in material flows accounting. U.S. Construction Industry Building-related activities use materials, energy, and water and gen- erate municipal solid waste. An input-output study of nearly 500 sectors in the U.S. economy found that the construction sector produces the most CO2 emissions through the manufacture, transport, and use of materials (Norris, 1998~. At about 300 million metric tons, this sector creates more upstream fossil fuel CO2 emissions than the direct total fossil fuel CO2 emissions of all U.S., state, and local government electric utilities. This sector is also characterized by heavy use of aggregates, metals and alloys (e.g., copper, zinc, aluminum, and steel), glass, and wood, with material choices made largely on the basis of cost, availability, and perfor- mance rather than environmental impacts. In addition, the ultimate dis- position of these building materials is rarely taken into consideration dur- ing the initial planning and design phase of a building, and it is general industry practice to order 10 to 25 percent excess building materials in case of weather damage or breakage during shipment. Only recently has a level of awareness developed of the importance of waste streams from construction sites as they relate to local landfill and site stockpiling issues. The Leadership in Energy and Environmental Design assessment sys- tem (LEED), a green building rating system developed by the United States Green Building Council (USGBC), is intended to foster increased awareness of these and other issues and to encourage and reward im- proved practices (for more information see, USGBC, 2003~. In the rela- tively short time since its introduction, it has become the most widely used U.S. environmental evaluation system in both the public and the private sectors. Work is now under way to determine how the system can be improved by including more quantitative life-cycle assessment tech- niques (Sidebar 4.1~. That work, in turn, will benefit from the existence of material flows accounts.
48 MATERIALS COUNT MATERIAL FLOWS ACCOUNTING IN THE PUBLIC SECTOR AND NONGOVERNMENTAL ORGANIZATIONS This section focuses on the uses and usefulness of material flows data at the multinational, national, state, and municipal levels. Multinational Material Flows Accounting and Derived Indicators The World Resources Institute, in cooperation with other international institutions, compiled two reports on material flows accounts and derived indicators for a number of national economies (Adriaanse et al., 1997; Matthews et al., 2000) (Sidebar 4.3~. Presenting a conceptual model of the complete material cycle in the industrial economy through material flows analyses, these studies indicated that waste generation continues to in- crease despite increased efficiencies in the industrial economies; that a large proportion (50 to 75 percent) of annual resource inputs to industrial economies returns to the environment as wastes within a year; that out- puts of many potentially harmful materials are increasing, notwithstand- ing the successful stabilization or reduction of others; and that fossil energy-based outputs dominate output flows in all industrial countries. Based on its studies, the World Resources Institute concluded that physical accounts are needed because the knowledge of resource use and waste outputs is surprisingly limited. National economic accounts do not include activities for getting natural resources that are not bought or sold, even though there might be environmental consequences of using these resources. With the knowledge that current economic accounts and envi- ronmental statistics are not adequate for tracking flows into and out of the economy, there is concern that society might lose sight of some materials in the course of processing and entirely miss other major flows, such as soil erosion from cultivated fields, that do not enter the economy (Adriaanse et al., 1997~. Focusing on national and multinational levels, the World Resources Institute's overarching conclusion is that targeted poli- cies will be needed to accelerate the trend toward dematerialization and to encourage the substitution of benign materials for those that are envi- ronmentally harmful. The European Union member states have collaborated recently to be- gin standardizing the principles and practice of material flows account- ing. As noted in Chapter 2, agreed-upon definitions, a framework for the accounts structure, guiding principles, and trends from analyses of mem- ber states' national accounts are discussed in detail in the Eurostat guide- lines document (Eurostat, 2001~. The development of key, derived input, consumption, and output indicators is a primary purpose of the accounts.
MATERIAL FLOWS ACCOUNTING: USES AND USEFULNESS 49 The guidelines document seizes this opportunity, and defines and inter- prets various indicators relative to environmental impacts. Developments in lapan have been slower than in Europe. Although lapan is still in the preliminary stage of development of national material flows accounts, it has more than 10 years of history in material flows analysis for environmental accounting. In the early 1990s, lapan sanc- tioned a pilot study on natural resource accounting for forests, and mate- rial balance analyses were begun in 1992 for a report on the quality of the environment (Moriguchi, 2002~. Japanese researchers have also partici- pated in the aforementioned international comparison studies on mate- rial flows (Adriaanse et al., 1997; Matthews et al., 2000) and have done a detailed material flows accounting white paper on a recycling-based society (Y. Moriguchi, National Institute for Environmental Studies, Japan, personal communication, 2002~. Material flows accounts are not yet insti- tutionalized as a routine operation by a statistical agency, but Japan is progressing in that direction. One example of the usefulness of material flows accounting in Japan is highlighted in Sidebar 4.4. U.S. National Accounting Although not formally defined based on a national or international standard system, there are several examples of national material flows accounting and analysis documents generated by the U.S. Geological Sur- vey, the Environmental Protection Agency and other agencies. The ben- efits of this work and of ongoing programs are discussed in many of the referenced sources and, in some cases, have been mentioned earlier in this report. For example, high levels of silver were detected in San Francisco Bay in the 1970s. A follow-up study found that the problem was caused by product- and location-specific material flows in waste streams. Analy- sis ultimately lead to an understanding of the potential value of material flows accounts at a national level (Kimbrough et al., 1996~. Had formal national-level accounts been in place, they would have been the first logi- cal step in assessing the high levels of silver in San Francisco Bay, making it possible to quickly answer questions about silver flows in the local economy. Rejeski (1998), after summarizing the lessons learned from the silver case and two other scenarios (lead and arsenic), muses that these cases "point to a future where intelligent environmental policy will in- creasingly depend on our ability to understand material leakages, substi- tutions, and shifts, and to understand these systemically across space and time."
50 MATERIALS COUNT National Security Implications The previously noted national security implications of material flows accounting deserve special attention. Figure 1.2 provides a striking illus- tration of the extent to which the United States is 100 percent dependent on foreign sources for a wide range of non-fuel commodities and more than 50 percent dependent on such sources for many more materials. A national material flows accounting system, and the resulting flows accounts, would give national security strategists a much better picture of the sources and distribution routes of materials critical to the U.S. economy. For example, more than 75 percent of some major metals used in new technology development or in products conventionally manufac- tured in the United States are imported (Wagner, 2002~. As cases in point,
MATERIAL FLOWS ACCOUNTING: USES AND USEFULNESS 51 palladium and platinum, used in photovoltaic and fuel cells for clean power generation and in catalytic converters, respectively, come almost exclusively from Russia and South Africa (Wagner, 2002~. State Material Flows Accounting As noted in Chapter 2, the State of New Jersey has been tracking the movement of toxic materials since the mid-199Os, not only as production wastes, but also in transport to and from factories, stored on the plant site, and leaving in products or as products (Dorfman and Wise, 1997) (Sidebar 2.1~. Although this information is gathered at the plant scale, the results can be used for statewide policy making, and the program stands as an
52 MATERIALS COUNT
MATERIAL FLOWS ACCOUNTING: USES AND USEFULNESS , ~ ~ , ; - .s . :. - . I.; y ~ 3, ;; · . - .. i ........ ,~,/--- ,~ , - .. ...- ..... .. ....... ....... ........ , .... C02 Unit: (lOOOtC) Aluminum (Unit. 1000t) ~ 10- 13 ~ 200 ~ 300 _ 600 - 700 ..................... - -- -- ' C02 Unit: (1 OOOtC) Aluminum (Unit: snout) ~ 10 - 13 _ 200 - 300 _ 600 - 700 53 - :-;, ' 1Q91 ~ .. .... A' ¢* ; ~ ~ 48 ~ ! ~ .... ---- - ZQ1 .,., ,.. ,, , ..................................................................................................... 'oil .'g.: ~ i'; ~ ~ · · my:, -,9 ..... , , , ~ ,. '' semi . ..... - . .. .................................................................................................................................................... ~~ ·*,~ ~., By ~ ~~ AS 6 ~ it, ' - r.,.; ~ ~~ -. -- -- i- ~ - .~~ .-.. s ~ I ; .~ my, 4Z1 .~ :~ A ., ', >' ~4 .5 ~ r.--~ 7~ ,. ,, : ,, ,.' _~j; ~ a~ ~ me; N^,5~ ~~ ./0 ~~f...,,.,~, .?.?. Prod. - - ~imp. .. --- · ...... .. . , - - - . .......... .~....> ... ........ ....... , .. I '. . 13 - 50 ~ 50~100 ~ 100~200 1~ 300 - 400 ~ 400 - 500 _. Ann Grin _ 700 - 300 _ 800 - ;.~'-''''''''''''''''''',,~'Q';";, ,~ .;:.... ~ .; ): -; ~ ~~ ri~,~^% .- ~ -:: ' ~ ,..-. ...- . I, ,.- . 2~3.~.. '' :' ' :.' / , . .: . : . · . ~ .. .. · .... . . .... ., ~ .s -~E ....... - - ~ r ,,, . ................... . ~ :'' .. ~., ~ 2' . ., _ 13-50 _ 50~100 _ 100~200 _ 300-400 _ 400-500 ~ 500-600 _ 700 - 800 _ 800 - ......... .
54 MATERIALS COUNT excellent example of substance-specific material flows accounting at a re- gional level. The benefits of the program to date have been well docu- mented. For example, New lersey found three unique ways in which the material accounting data are useful: first, the data provide the prelimi- nary information needed for assessing worker and community exposures because they identify which toxic chemicals are used at industrial facili- ties and in what quantities; second, the data provide a means of measur- ing the results of source reduction activities by assessing the efficiency with which companies are using chemicals; and third, the data provide a means for regulators to verify the accuracy of chemical quantities reported to the Toxics Release Inventory. Notably, although the use of toxic chemi- cals in general increased in New lersey between 1991 and 1994, the use of particularly hazardous chemicals dropped by about 5 percent (down 13.3 billion pounds). Likewise, even though the non-product output (material used less, material consumed less, material shipped as or in product) in- creased from 1991 to 1994, facilities reported the highest level of source reduction in 1993. It should also be noted that there are some concerns that the New lersey database is not readily available to the public, is diffi- cult to use, and is not complete (Dorfman and Wise, 1997~. It is clear that much more could be gained from this groundbreaking program if there were a framework for linking the plant-level flows within the state and across state boundaries to other states or regions. In the con- text of the definitions provided in Chapter 2, there is the potential to ex- tend this database to the level of a state physical input-output table, which in turn could be made part of a national physical input-output table by including cross-border flows. Municipal Accounting Applications An overview of selected public sector activities, from the municipal to the national levels, further develops the case for creation of a systematic material flows accounting framework. Whether the physical asset is a bridge, a street, or a building, there are enormous material flows implica- tions in the life cycle of municipal assets. For example, a bridge needs periodic painting to maintain its structural integrity, which means con- tainment to protect waterways below from lead, the erection of steel scaf- folding, and concern about the chemical makeup of the paint. Similarly, black asphalt roofs have to be replaced about every 20 years with a full range of material and energy flows, along with their environmental im- plications. For any municipality of reasonable size, this is a continuous process. In many cases, there are better alternatives to conventional prac- tice, but it is inordinately difficult to undertake sufficient research at the municipal level to challenge entrenched interests and insist on a change
MATERIAL FLOWS ACCOUNTING: USES AND USEFULNESS 55 in the use of materials. A material flows accounting system could poten- tially provide powerful corroborating information in support of decision- making regarding substitution of materials and the diminution of envi- ronmental impacts. In general, the ability to undertake full accounting of materials could more comprehensively illustrate the value and tradeoffs of asset design, construction, and maintenance decisions at the municipal scale. Geo- graphic information systems are increasingly being used in municipali- ties to satisfy government financial accounting standards and to provide information to enhance decision-making regarding the spatial relation- ships of public infrastructure and physical assets in geographic areas. (Fitch et al., 2001~. Systematic material flows accounting, linked with municipal geographic information systems, would offer yet another tool for tracking material flows associated with these assets and would help local governments achieve the greatest and best use of available physical and financial resources. SUMMARY AND FINDINGS The primary purpose of a material flows accounting system is to cre- ate, develop, and maintain a formally structured, common database sys- tem that integrates, consistently, existing material flows data from gov- ernment, business, and public sources such that they may be used, through analyses and linkages with other databases, to provide insights on material flows in physical and/or economic systems and permit more holistic, robust public policy decisions based on the integration of eco- nomic, public health, and environmental considerations. The activity of informing public policy generally involves the creation of various types of indicators of the intensity of material flows on the input and output side related to the impact on the environment, but could also include their relationships to economic, quality-of-life, and public health measures. Uses of material flows data for different types of analyses exist at many levels in the United States and abroad. The analyses demonstrate the usefulness of materials flows data, and some in the international com- munity have pointed to the need for, and usefulness of, material flows accounts capable of embracing data from the global to the local levels. From the above descriptions it can be seen that different sectors of industry track the flows of materials important to their business, includ- ing recycled materials. They do not use a formally defined standard sys- tem of accounts for this purpose. The data that are collected obviously allow companies to improve their business performances or remove un- certainties regarding materials availability, thereby proving useful to
56 MATERIALS COUNT them. Such data could be available for incorporation into a national sys- tem of material flows accounts but would have to be converted for use in a common database. Generally, the situation is similar for federal and state government agencies in the United States, although for different purposes than indus- try. For example, the EPA and the state of New lersey track chemicals designated as toxic or hazardous, but not by using a formal material flows accounting system. New lersey focuses on achieving mass balances at the chemical facility level, whereas EPA focuses on estimating the amounts of chemicals flowing into the environment. The only formally defined systems of material flows accounts exist in European Union (KU) member states and in Japan. Material flows account- ing does not play a prominent role in Japan yet, but several EU member states use it regularly. The European Union has converged on a union- wide standard for a material flows accounting system, that represents the most visible, formal standard at this time. The committee notes, from the examples cited, that such material flows databases could be used to accomplish the following: · Generate periodic reports on consumption rates of natural re- sources and their efficiency of use to improve the management of these resources. · Track individual materials and product-related multiple materials that may impact natural and human systems to allow action to reduce negative impacts and identify the need to find alternative materials. · Indicate periodically the potential implications, including trends, of materials use on natural and human systems to raise awareness and stimulate improvements in management. The committee notes that the existence of a formal economy-wide material flows accounting system and a national physical input-output table would likely provide a range of benefits, including the following: · Federal and state agencies would gain better information on the sources and uses of the mineral and renewable resources within their re- sponsibilities. · In the pursuit of continuous improvement of economic and envi- ronmental performances, corporations would have better information about current and potential supplies of the materials they use, about po- tential positive and negative environmental impacts of these materials, and about substitutes that could be used to supplant undesirable materi- als in their systems and processes.
MATERIAL FLOWS ACCOUNTING: USES AND USEFULNESS 57 · Users would be able to track sources, flows, and dispositions of materials to determine more effective strategies for improving environ- mental and economic performance as well as efficiency of resource use. · National security strategists would have better data on the sources of materials critical to the U.S. economy and to national security from energy materials, to rare metals, to widely used material resources. The committee concludes that analyses using material flows data have al- ready proven useful. However, the data are not being used as effectively as they could be if there were a consistent framework and system to collect, analyze, and distribute the information routinely and to link data at vari- ous levels. The committee concludes that the establishment of material flows accounts and their use in analyses will improve public policy making. As noted in Chapter 2, proper material flows accounting, like financial accounting, requires the use of a standardized structure and specified principles. Therefore, the committee recommends that a structured material flows accounting framework that can accept and integrate existing and future data be established.
58 MATERIALS COUNT Sidebar 4.3 Noting Trends in Material Flows in Industrial Economies The Weight of Nations: Material Outflows from Industrial Economies (Mathews et al., 2000) demonstrates the use of national physical accounts for five countries in marking trends in total domestic output from 1975 to 1996. Total domestic output is defined as the aggregate measure of domestic processed output (material outflows from the economy) plus domestic hidden flows (those that do not enter the economy). The graph below, which includes the trends with annual data indexed to 1975 flow levels, shows a relatively stable pattern of total domestic outputs over the 20-year period, with few exceptions. Notably, Japan's index rose by 19 percent over the period, primarily reflecting an increase in hidden flows associated with publicly funded construction programs. The impact of reunification in Germany is also clearly shown, with an index decline occurring at a comparatively rapid rate since 1991. 250 - 200 - o o 11 us ~ 150- - 50 __ · ~ Austria Germany Japan --- Netherlands United States 11\ ~ 1~' - 1975 1980 1985 1990 1995 Trends in total domestic output for the period 1975-1996. SOURCE: Matthews et al., 2000. Copyright permission granted by World Resources Institute. PRE-PUBLICATION VERSION, SUBJECT TO EDITORIAL CHANGES
