In this recent research, we constructed hierarchically nested MRIO models. The term 'nesting' is used because a sub-national model can be transplanted into a global model to give more detail, somewhat like a Russian Matryoshka doll. More generally, local-scale could be nested within a sub-national MRIO, or regional-scale within a global country-scale MRIO.
These nested MRIOs open up new opportunities for investigating the linkages between sub-national production and consumption in different parts of the world via international trade, and the resulting environmental impacts. Incorporating sub-national spatial detail into these models is especially important for countries that exhibit significant regional variation in climate, resource endowment, production regimes, or international trade focus, such as the US, Canada, Brazil, Russia, India, China or Australia.
Water use in the Australian wine industry is used to demonstrate how this model would be useful. In the Figure, total water impacts of wine production is shown by n producing regions and m export destinations for each MRIO variant. Multipliers are shown for each of the n producing regions in panel (d), demonstrating the water consumption per economic unit of wine production (kL per $). These values are low for South Australia (SA) and Western Australia (WA) where water efficiency is high. The multipliers are also low for Rest of WA, Australian Capital Territory (ACT) and the Northern Territory (NT) since almost no wine is produced in these regions. However, after considering the embedded water in the supply chain, multipliers are very high for Queensland (Qld), followed by Tasmania (Tas) and Victoria (Vic).
Water-for-wine footprints (kL) for each MRIO variant – global (a), nested (b), sub-national (c), by producing region and export destination. Footprint panels use a common colour scaling. Multipliers (kL/$) are shown in (d) for producing regions only.
