Physical Input-Output Table

In physical input-output tables (PIOTS), the flows of products, instead of being expressed in monetary terms, are represented by physical measures (weight, time). Furthermore, these tables along with the traditional inter-industry transactions of monetary tables (MIOT), contain the flows between the economy and the natural environment. Thus, it is assumed that the use of natural resources by the economic system and return of the waste to the environment should be included in the process because the economy "depletes the environment beyond its regenerative capacity and pollutes it beyond its absorptive capacity." Traditional economics considers the economy as an isolated or closed system which is "a circular flow of exchange between firms and households in which neither matter nor energy enters or exits." It has no relation with its environment, while in fact it is an open subsystem of the earth's ecosystem. This standard vision is definitely useful for analyzing exchange, price formation, and income determination, but quite useless for studying the relation of the economy to the environment. The rationale behind material input-output tables, is based on the above observations. In this article after briefly examining this line of reasoning, the experience of two forerunning countries in the construction of material supply, use and input-output tables - Germany and Denmark - is presented. In explaining the subject, we have also benefited from several UN publications on System of Environmental Economic Accounting. In countries like Iran, with fragile environmental resources, this type of data and analysis, seems to be very promising.