Date of Submission

12-2018

Document Type

Thesis

Degree Name

Master of Science in Industrial Engineering

First Advisor

Gokhan Egilmez

Second Advisor

Ridvan Gedik

Third Advisor

Patrick Gourley

LCSH

Product life cycle--Environmental aspects, China--Economic conditions, United States -- Economic conditions

Abstract

Manufacturing is among the most important industries for an economy, which creates value-added, fosters innovation, stimulates employment and economic growth. Therefore, manufacturing industries are crucial for a country’s sustainable development not only for economic reasons but also for social (.e.g. employment, tax, etc.) and environmental ones. Thus, manufacturing activities’ contribution to the economy is critically related with environmental and social impacts. Sustainable economic growth is essential and necessary for a country to provide all necessary goods and services to its growing population.

And, this is highly linke with the creation of new jobs and in this context, manufacturing jobs have a substaintial multiplier impact on the employment and economic growht in manufacturing and other industries as a whole. Sustainable economic growth is crutically important for both developed and developing countries in the world from triple bottom line sustainable development perspective. Maufacturing industries have substaintial impacts on both economic and environmental domains of sustainable development. Among the largest economies of the world, the United States (U.S.) and China manufacturing industries have been in steeply rising competition, which results in considerable economic and environmental impacts for both of the countries and the rest of the world.

In this thesis, the U.S. and China manufacturing activities were studied from economic, and environmental life cycle sustainability perspectives for the period between 1995 and 2014. Multi-region input-output (MRIO) models were built by using World Input Output Database (WIOD) as the primary database, global input output tables, environmental impact and economic output multipliers, and manufacturing final demand. A MRIO model is built for each year in the 20-year study period, and it is comprised of 40 major economies and the rest of the world (ROW is considered as a country). In parallel with WIOD classification, each of the 41 country of major economies consists of 16 manufacturing and 19 service industries, which make up the whole economy for the corresponding country. MRIO models were used to derive economic output that occurs at the domestic and global supply chains as well as in each of the manufacturing industries as well as selected GHG emissions. Life Cycle Inventory (LCI) results were obtained from MRIO models. Moreover, the ReCiPe, a life cycle impact assessment (LCIA) methodoloy, was merged with the LCI to quantify the assocaited midpoint and endpoint impacts. The U.S. and China manufacturing industries impacts were studied individually, and compared analytically. Finally, structural decomposition analysis was employed to investigate how the change in terms of the model will drive the greenhouse gas emissions.

The results indicated that China’s manufacturing total economic output in 2014 only was approximately twice higher than the U.S. manufacturing total economic output, while China’s manufacturing global GHG emissions appraximatedly three times higher than the U.S. manufacturing GHG emissions.

In terms of the midpoint impacts, in 2014, China’s manufacturing impact on global warming was 285% larger than the impact of the U.S. manufacturing. Additionally, the impact of China’s manufacturing on ozone depletion was 338% higher than the U.S. manufacturing impact. Regarding the endpoint impact, the damage to human health and to the ecosystem from China’s manufacturing with 315% more than the U.S. Furthermore, the time series analysis of LCI results showed that China manufacturing started to exceed the U.S. manufacturing gobal economic output after 2007, which is correlated with the 2008 stock market crash. In terms of GHG emissions, China manufacturing began to surpass the U.S. manufacturing significantly after 2002, which draws attention worse emissions intensity per million dollar economic activity compared to the U.S. Additionally, the U.S. manufacturing global economic output has had a cumulative of 75% growth in global economic output while the increase in GHG emissions for the same period was almost 28% during the period between 1995 and 2014. For China, the cumulative economic growth, of the country’s manufacturing has been nearly 266%, and the growth in GHG emissions has been 121% for the same period.

Similarly, the time series analysis of LCIA showed that the Global Warming Potential (GWP) impact from the U.S. manufacturing has grown by a cumulative of 40% since 1995, while the impact from China’s manufacturing is 108% for the same period. Moreover, the growth of the impact to ozone depletion potential from US manufacturing is 45% and 87% from China’s manufacturing. Likewise, the growth of damage to human health and the damage to ecosystem from the U.S. manufacturing since 1995 is 37% while the growth is 89% from China’s manufacturing.

Finally, the structural decomposition analysis (SDA) results showed that GHG emissions per million dollar output drives the total GHG emissions in the reduction direction, while the changes in final demand drives the GHG emissions positively and increases the total GHG emissions for both countries. Overall, technological advancements in manufacturing industries typically decreased the emissions intensity per million-dollar economic activity in both economies. However, this did not create a substantial decrease in the emissions inventory due to the dominating impact of growing final demand and economic output. Especially, the inter-industry flows of China’s economy has not been able to successfully make the emissions’ intensity reduce the GHG emissions cumulative inventory levels as a whole in the last two decades. U.S. had the same problem with China in terms of total GHG emissions, however, the U.S. GHG emissions intensity had been more rapidly declining then the China.

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