Changes in CO2 emissions from China's energy-intensive industries: a subsystem input-output decomposition analysis

This paper presents a subsystem input-output model to analyse the patterns behind the evolution of CO2 emissions in energy-intensive industries. Two emissions accounting principles (the production accounting principle and the consumption accounting principle) are applied. The embodied CO2 emissions are divided into the production-based CO2 emissions associated with three components (internal component (IC), external component (EC) and demand level component (DLC)) in addition to the CO2 emissions identified by the indirect component (INC) from a consumption perspective. A structural decomposition analysis is further conducted to decompose the emissions changes into 3 effects, which are the emissions intensity effect (ET), the technological effect (TT) and the demand effect (DT). The results show that the external component is primarily responsible for increased CO2 emissions and the demand effect is the key factor in the decrease of CO2 emissions. Moreover, sectors with a positive difference between production-based and consumption-based emissions are more sensitive than the others to the technological changes. Thus, different measures should be adopted by considering sectorial realities.