Optimal production resource reallocation for CO2 emissions reduction in manufacturing sectors

To mitigate the effects of climate change, countries worldwide are advancing technologies to reduce greenhouse gas emissions. This paper proposes and measures optimal production resource reallocation using data envelopment analysis. This research attempts to clarify the effect of optimal production resource reallocation on CO2 emissions reduction, focusing on regional and industrial characteristics. We use finance, energy, and CO2 emissions data from 13 industrial sectors in 39 countries from 1995 to 2009. The resulting emissions reduction potential is 2.54 Gt-CO2 in the year 2009, with former communist countries having the largest potential to reduce CO2 emissions in the manufacturing sectors. In particular, basic material industry including chemical and steel sectors has a lot of potential to reduce CO2 emissions.