Critical transmission sectors for CO2 emission mitigation in supply chains

Abstract

Fossil fuel-based economic growth leads to significant environmental pressures such as CO2 emissions resulting from production and consumption activities. Existing studies mainly focus on identifying critical sectors in an economy that directly generate CO2 emissions (production-based accounting) or indirectly drive CO2 emissions through supply chains (consumption-based accounting). Though results from these studies are essential for guiding emission mitigation, a new perspective is also important for identifying key transmission sectors that facilitate CO2 emissions in supply chains. In this study, we use a betweenness-based method and a multi-regional input-output (MRIO) model of China in 2012 to identify the critical transmission sectors for CO2 emissions. We identify sectors of Chemical industry in Shandong and Jiangsu, Metallurgy in Jiangsu, Hebei, Shandong, Henan, and Liaoning, and Electricity and hot water production in Beijing as key transmission sectors. We also find that only the first three production layers (PLs) account for over 95% of the total embodied CO2 emissions for each critical transmission sector. Improving production efficiency in these sectors has significant potential to reduce CO2 emissions both downstream and upstream of their supply chains. Our method and results provide an alternative perspective for sector-specific policy recommendations on mitigating CO2 emissions caused by the trade among provinces and sectors. Furthermore, this study plays significant strategy contributions on social-economic costs of carbon emission and carbon reductions.