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known as bottom-up analysis and akin to life-cycle analysis, accounts for the energy inputs and outputs
in a process by aggregating them through the sequential stages of production. Economic input-output
analysis, or top-down analysis, converts economic input-output tables into energy units by multiplying
by sector-specific energy intensity values. A third method is emerging that is a hybrid of both of these
methods. The choice of which method to use is normally made on the basis of where the system
boundary is drawn (see Figure 1 and Figure 2), or by data restrictions.
Figure 1. Biophysical model of the energy-economy system based on Hall et al. [16] (p.38).
The energy system is depicted as a series of processing stages: extraction, processing and
distribution. The economy is split into four sectors: industrial, residential, transport and
public, with associated outputs. The scale of the system boundary may vary along the
process chain dimension.
Figure 2. Production process with increasing levels of analysis by expansion of the system
boundary to include more inputs.
ChemicalBioGeo-
Processes
Sun ResourceEnergyQ UnprocessedExtractedEnergy
EnvironmentalServices
ProcessedEnergy Available forEnergy
Heat, Work
IndustrialSector
Residential,Commercial
Sector
TransportSector
PublicSector
Capital
Labour
ServicesGovt.
OTHER ECONOMIC SECTORS
ExtractionLosses ProcessingLosses DistributionLosses
ConversionLosses Consumption
SYSTEM BOUNDARY 3
SYSTEM BOUNDARY 2
SYSTEM BOUNDARY 1