Analysis of the Material Flow of New Members of the European Union

Lembo Tanning; Toivo Tanning

doi:10.12691/jbe-2-5-1

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Analysis of the Material Flow of New Members of the European Union

Lembo Tanning^1,, Toivo Tanning²

¹TTK University of Applied Sciences, Tallinn, Estonia, EU

²Tallinn School of Economics, Tallinn, Estonia, EU

Abstract

1. Introduction

2. Methodology

3. Analysis of Material Flow

4. Conclusions

References

Abstract

With regard to acute political and economic situation in Eastern Europe, with the European Union (EU) and Russia on mutual economic partial blockade, has become very topical, what is the position of material in the former Soviet bloc countries. The purpose of this article is to analyse the material or resource flow of new EU states, the main emphasis the Baltic countries and to compare them on the EU level. Energy security is always one of the most important problems in the EU. The EU and including the Baltic countries are poor of material and energy region. The analysis showed that the greater use of resources does not always lead to economic growth. Effective use of resources is different in from country to country. How far is the use of these lands resource, including the 2009. economic crisis? What are the prospects for a partial boycott of resources? What are the lessons from the resource flow?

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Keywords: material flow, domestic material consumption, fossil energy materials, imports, exports, regression analysis, Baltic countries

Journal of Behavioural Economics, Finance, Entrepreneurship, Accounting and Transport, 2014 2 (5), pp 104-115.
DOI: 10.12691/jbe-2-5-1

Received October 13, 2014; Revised October 23, 2014; Accepted October 26, 2014

Cite this article:

Tanning, Lembo, and Toivo Tanning. "Analysis of the Material Flow of New Members of the European Union." Journal of Behavioural Economics, Finance, Entrepreneurship, Accounting and Transport 2.5 (2014): 104-115.

Tanning, L. , & Tanning, T. (2014). Analysis of the Material Flow of New Members of the European Union. Journal of Behavioural Economics, Finance, Entrepreneurship, Accounting and Transport, 2(5), 104-115.

Tanning, Lembo, and Toivo Tanning. "Analysis of the Material Flow of New Members of the European Union." Journal of Behavioural Economics, Finance, Entrepreneurship, Accounting and Transport 2, no. 5 (2014): 104-115.

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1. Introduction

A resource-efficient Europe is one of the main objectives of the Europe 2020 Strategy ^[1], which aims at guiding the effective use of resources to achieve sustainable economic growth.

We analyze the material flow problems of new European Union (EU) from Baltic and Central and Eastern Europe (CEE-8) or former Soviet-bloc countries, with the exception of and . The Baltic States are part of the former Soviet Union a half century. After the collapse of the Soviet-bloc in 1989–90, Baltic and CEE-8 countries became fully independent again. This will help them to better understand the economic backwardness of place Western Europe, the countries of the Western civilization.

The history and economic background of his country's is more detail in previous earlier publications of authors. [2-12]^[2].

Natural resources underpin the functioning of the European economy and our quality of life. These resources include raw materials such as fuels, minerals and metals but also food, soil, water, air, biomass and ecosystems. The pressures on resources are increasing. Intensive use of the world's resources puts pressure on our planet and threatens the security of supply. Continuing our current patterns of resource use is not an option. In response to these changes, increasing resource efficiency will be key to securing growth and jobs for Europe. It will bring major economic opportunities, improve productivity, drive down costs and boost competitiveness. ^[1]

All economic systems utilize a variety of resources. The scarcity of resources forces countries, companies and people make a variety of choices. That's what we look at on the basis of the new EU Member States or former Soviet-bloc countries countries.

The theoretical foundations are given in more detail the works of other authors ^{[13, 14, 15, 16, 17]} and Eurostat ^[1].

2. Methodology

The indicator DMC is defined as the total amount of material directly used in an economy. DMC equals Direct Material Input (DMI) minus exports. DMI measures the direct input of materials for the use in the economy. DMI equals Domestic Extraction (DE) plus imports ^{[18, 19]}.

Domestic material consumption by material of Eurostat is in environmental accounts.

Economy-wide material flow accounts (EW-MFA) compile material flow inputs into national economies. EW-MFA cover all solid, gaseous, and liquid material inputs, except for water and air, measured in mass units per year. Like the system of national accounts, EW-MFA constitute a multi-purpose information system. The detailed material flows provide a rich empirical database for numerous analytical purposes. EW-MFA are used to derive various material flow indicators such as:

Domestic extraction (DEU): total amount of material extracted for further processing in the economy, by resident units from the natural environment;

Imports (IMP): imports of products in their simple mass weight;

Direct material input (DMI): measures the direct input of material into the economy; it includes all materials which are of economic value and which are availble for use in production and consumption activities (=DEU+IMP);

Exports (EXP): exports of products in their simple mass weight;

Domestic material consumption (DMC): measures the total amount of material actually consumed domestically by resident units (=DEU+IMP-EXP).

Note: IMP and EXP are distinguished into extra-EU-trade and total trade.

In order to compare the performance over time and across various countries the second resource productivity ratio employing GDP in chain-linked volumes has been indexed to the year 2000. This index allows a comparison of countries' resource productivity performance ^[20].

This can be expressed in monetary terms, as monetary return per unit of resource. Here in million or thousand tonnes.

Material resources are divided: biomass (MF1), metal ores (gross ores) (MF2), non-metallic minerals (MF3), fossil energy materials/carriers (MF4), other products (MF5) and waste for final treatment and disposal (MF6). Here we look also subgroups of MF4: liquid and gaseous energy materials/carriers (MF42); crude oil, condensate and natural gas liquids (MF421) and natural gas (MF422).^[19]

In summary, the main indicators are: Domestic Extraction Used (DEU). Domestic Material Consumption (DMC). Exports (EXP). Imports (IMP). Direct Material Inputs (DMI).

(1)

(2)

^[5]

Econometrics is the application of , , and, more recently, , to economic data and is described as the branch of that aims to give content to economic relations. ^[21] The basic tool for econometrics is the , but we use the complicated nonlinear model, which can perform more specific conclusions.

The processing of data is used to regression analysis. Regression analyzis are statistical analysis procedures that have the goal of relationships between a dependent and one or more independent variables to model. They are particularly used when relationships to describe quantitatively or values of the dependent variables are to predict ^{[22, 23]}.

Mathematically, the relationship between the independent variable x and the dependent variable y are represented as:

(3)

(4)

In general, we can model the expected value of y as an nth degree polynomial, yielding the general polynomial regression model:

(5)

Most authors using simple linear regression. It's convenient to use, but as a rule it is not well-characterized complex processes. We use polynomial regression, which gives a much more precise picture. Numerical values of the parameters used to find the indirectly least squares method or ordinary least squares. We are a non-linear correlation ^{[22, 23]}.

For this purpose we use the computer program. Microsoft Excel provides a set of data analysis tools— called the Analysis ToolPak— that you can use to save steps when you develop complex statistical or engineering analyses.

All figures are the authors’ illustration.

3. Analysis of Material Flow

3.1. Material Flow Analyses by Total Domestic Material Consumption

Next we analized material flow in EU – 27, CEE-8 and Baltic countries of tonnes.

Table 1. Total Domestic Material Consumption (DMC). Thousands tonnes [18]

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Analysis of the Material Flow of New Members of the European Union

Science and Education Publishing

Analysis of the Material Flow of New Members of the European Union

Abstract

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Cite this article:

1. Introduction

2. Methodology

3. Analysis of Material Flow

Table 1. Total Domestic Material Consumption (DMC). Thousands tonnes [18]

Table 2. Components of DMC. Total imports resource, thousands tonnes [18]

Table 3. Components of DMC. Total exports resource, thousands tonnes [18]

Table 4. Material flow accounts, thousands of tonnes, 2012 [24]

Table 5. Domestic Extraction Used, thousands tonnes [18]

Table 6. Total resource of Estonia, thousands tonnes [18]

Table 7. Total resource of Latvia, thousands tonnes [18]

Table 8. Total resource of Lithuania, thousands tonnes [18]

Table 9. Material flow accounts of EU-27, thousand tonnes [24]

Table 10. Domestic material consumption by material - 1 000 tonnes. Biomass (MF1) [19]

Table 11. Domestic material consumption by material,1 000 tonnes. Metal ores (gross ores) [19]

Table 12. Domestic non-metallic minerals consumption - Million tonnes. [19]

Table 13. Domestic fossil energy materials consumption - million tonnes. [19]

Table 14. Domestic fossil energy materials consumption - 1 000 tonnes. [19]

Table 15. Total DMC by key components, thousand tonnes [19]

Table 16. DMC by main material category, thousand tonnes [19]

4. Conclusions

References

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