Consistent and unbiased carbon dioxide emission multipliers: Performance of Danish emission reductions via external trade

Climate change research is currently a topic of great interest for economic researchers. In particular, environmental input-output analysis increasingly plays an important role in measuring the economic and environmental effects of sustainable development policies in Europe. Other approaches also exist, such as econometric modelling, in which impacts are quantified on statistical grounds and with certain desirable properties (efficient estimates, confidence intervals, hypothesis testing, etc.) that are not found in the input-output approach. Consequently, this paper merges the two approaches to address the calculation of unbiased and consistent carbon dioxide emission multipliers for Denmark and their respective confidence intervals. The use of the supply and use system instead of the symmetric input-output table also presents the opportunity to avoid the common problems associated with the construction of technical coefficients (technology assumptions, negatives, etc.). Moreover, a new policy-relevant application of these multipliers is introduced: the quantification of the performance of the carbon dioxide emission reductions carried out by industries via external trading.