An optimal TEC model with input-Output analysis and its application for reducing CO2 emission in China

Abstract

In managing regional environmental-economic systems, it is significant to design a comprehensive total emission control (TEC) policy. In this paper, an optimal TEC model with an input-output analysis is established to maximize the total production profit of all the economic sectors. With an empirical application of the model on reducing total CO2 emission in China, a TEC policy scheme is approximately calculated by using the national input-output table to give optimal solutions respectively for total production, final use and the corresponding CO2 emission of each sector. Finally, the key sectors most responsible for total emission reduction are identified, and then the impacts of improving emission intensity coefficient of the sector with the highest emission share are analysed quantitatively on the allocations of total CO2 emissions set as the TEC target by policy maker.