Input–output analysis

The Energy Input-Output (EIO) analysis offers a systematic method to address energy flows within an economy as it extends the standard Input-Output framework to calculate total energy requirements for delivering commodities to final demand. The standard Leontief model and Structural Decomposition Analyses can be also adapted to focus on international or interregional spillovers and feedback effects with a Multi-Regional Input-Output (MRIO) framework, whilst the price model can be used to analyze prices changes due to energy cost variations. The EIO models also allow us to explore the relationships between energy and environmental variables, facilitating assessments of green impacts associated with energy use. Yet, the EIO approach suffers a number of methodological limitations and sometimes leads to physical absurdities. To tackle these issues uniform energy prices are usually assumed even if several techniques have been proposed in the literature to obtain more realistic results