The key sectors for energy conservation and carbon emissions reduction in China: Evidence from the input-output method

This research defines the key sectors driving China's energy consumption and CO2 emissions from the input-output relationship and demand elasticity. This method allows us to analyze the correlation of energy consumption and CO2 emissions with economic activities of various sectors, and reveal which sectors deserve more attention as Chinese Government shapes appropriate policies for energy conservation and carbon emissions reduction. The results indicate that the key sectors in China's economic system not only drive energy consumption and CO2 emissions of other sectors, but also consume substantial fossil energy and emit tremendous CO2 stimulated by the demand from other sectors. Therefore, they should be paid close attention by Chinese government, especially the sectors of Manufacture of Basic Chemicals, Construction of Buildings, Wholesale and Retail Trade, Transport via Road, and Real Estate. In addition, the case study shows that China's road transportation experiences extensive developing mode and effective measures should be taken to help achieve its low-carbon development due to its dominant role in the whole transportation sector.