The Impact of Structural Change on Physical Flows in the Economy: Forecasting and Backcasting Using Structural Decomposition Analysis

Abstract

Structural decomposition analysis (SDA) is employed to examine physical flows other than energy and energy-related emissions. A unique set of hybrid-unit I/O tables, including both physical and monetary data, was constructed for this purpose. The decomposition results are used to perform forecasting and backcasting (target) analyses. The approach is applied to the use of iron and steel, and plastics in the Nether-lands over the period 1990 to 1997. The analysis shows that export-driven “rematerialization” has occurred during this period, and that the physical volume of the materials considered will continue to grow until 2030 under a wide range of scenarios. (JEL N5, Q3)