CO2 emissions in the global supply chains of services: An analysis based on a multi-regional input-output model

As the service sector dominates the economy in developed countries, its environmental impact has become an important issue. Based on a multi-regional input-output model, this paper estimates consumption-based emissions of service sectors of 41 countries and regions, and discusses the emission abatement policy of service sectors. The results indicate that consumption-based emissions of the service sector in most countries and regions are much greater than direct emissions generated by the service sector. Further decomposition by production sources demonstrates that final demand for services in certain countries causes substantial emissions in the other countries. In most countries, major parts of consumption-based emissions of the service sector come from upstream emissions in non-service sectors due to the intermediate consumption of non-service inputs in the service sector. For the US and China, the consumption-based emissions of their service sectors are traced back to different service consumption bundles and production sectors, which enable us to identify service categories and production sectors that play key roles in the impact of service sectors on CO2 emissions. Finally, policy implications of the results are discussed for the climate effect of the service-oriented economy, global mitigation of climate change, sustainability, and the decarbonization of the service sector.