An approach of measuring environmental protection in Chinese industries: a study using input–output model analysis

Abstract

With a green economy making significant developments at a global scale, the environmental protection industry has become an increasingly important part of China's national economy. China's environmental protection industry is a strategic emerging industry and is expected to become a future pillar of the economy. To promote the environmental protection industry in China and to guide environmental protection activities in various sectors, the input–output method was used to develop China's first environmental protection industry specifically using an externalized input–output model. Various coefficients were measured and analyzed from the perspective of the industry chain. The results reveal that the development of environmental protection activities and related environmental investment should give priority to sectors with a current shortage of environmental protection industry input. Concentrating on these industries will provide relatively higher benefits. These industries include primary manufacturing industries, the wholesale and retail marketing industries, the financial industry and some sectors in second industries. In addition, the results of a demand and supply model reflect the fact that the environmental protection industry in China should actively promote the environmental finance and fund environmentally-friendly products. Finally, the model provides a useful tool that will allow government agencies to develop scientifically sound polices to simulate the economy and provide positive effects on investments.