The Analysis of CO₂ Emissions with Input-Output Methods

Abstract

Having outlined input-output methods in Chapter 7, in this chapter we apply this technique to the structural analysis of CO₂ emissions by economies¹. In Section 8.2 we lay out the basic assumptions necessary to achieve this structural description, and derive the fundamental matrix equation attributing total CO₂ emissions to final demand. Section 8.3 applies the technique of ‘decomposition by differencing’, derived in Chapter 4, to the matrix equation describing total CO₂ emissions. Section 8.4 further extends the analysis, to take account of the roles of imports and exports in defining the CO₂ emissions for which a country can be said to be ‘responsible’. Section 8.5 examines the sensitivity of total CO₂ emissions to changes in the model parameters. In Section 8.6 the material covered is briefly reviewed.