Supply-side structural effect on carbon emissions in China

This paper carries out a structural decomposition analysis (SDA) of production-related carbon emissions in China from 1992 to 2005 by adopting the Ghosh input-output model. It finds that the supply-side structure, measured by sectoral shares in value added, increased production-related carbon emissions in 1992-2002, mainly due to the rapid growth of manufacturing sectors, but reduced them in 2002-2005 thanks to the decreased shares of carbon-intensive sectors. Whatever the supply-side structure, forward carbon multipliers of each sector or changes in supply-side sectoral shares and related emissions effects calculated by adopting the Ghosh input-output model were different from their demand-side counterparts estimated by adopting the Leontief input-output model. The results suggest optimizing the supply-side structure and lowering the forward carbon multipliers to control carbon emissions in the future.