Methods and Data 2
how do we analyse hotspots?
The Hotspot Analysis Tool for Sustainable Consumption and Production (SCP-HAT) combines in a single framework national environmental and social data (i.e. territorial accounts) with trade information for the estimation of supply-wide environmental pressure and impact indicators (i.e. footprints).
For the estimation of footprint-type indicators, two approaches are applied: Environmentally extended multi-regional input-output (EE-MRIO) analysis and Life Cycle Impact Assessment (LCIA).
Domestic data on pressures (e.g. material extraction) and impacts (e.g. deforestation) expressed in physical units (also called ‘satellite accounts’) are linked to monetary data on transactions among economic sectors and final consumers of different countries.
This approach allows tracing all the pressures and impacts occurring at the different stages of even very complex supply chains and allocating them to the country of final consumption, or sectoral production. This type of analysis is used to identify hotspots of unsustainable consumption and production.
Using the same methodology and homogenous datasets for all countries in the world allows to compare different environmental categories, pressures and impacts, domestic and footprint perspectives and countries among each other. Note that due to methodological differences and data harmonisation reported results may differ from results reported by statistical institutions.
Concept figure: The SCP-HAT tracks the flows of goods and services, linking domestic pressures (occurring in the national environment) with foreign consumption (in countries A to K), as well as national consumption with pressures on the environment abroad.
To analyse hotspots of (un)sustainable consumption and production, two analytical perspectives are applied by the SCP-HAT – domestic production (“territorial approach”) and consumption footprint (“footprint approach”).
For the domestic production perspective, environmental pressures and impacts are illustrated for the country where they physically occur. For example, the amount of greenhouse gas emissions produced or raw materials extracted in the domestic economy.
In the consumption footprint perspective, environmental pressures and impacts are allocated to the country where the final consumption of products and services occurs. The consumption footprint looks across the whole supply chain of these goods, including all activities occurring in- and outside the country. For example, land used within and beyond national borders to produce food products consumed in a certain country.