Demand contributors and driving factors of Singapore’s aggregate carbon intensities

Abstract

Singapore is an island city state. It lacks conventional energy resources and is alternative energy disadvantaged. Yet its aggregate carbon intensity, given by the ratio of carbon emissions to GDP, dropped by 30% from 2005 to 2014. Currently it has a relatively low carbon intensity. Using I–O analysis, we study Singapore’s aggregate carbon intensity and the factors contributing to its changes at different levels, i.e. final demand, sector, and transmission levels. It is found that domestic exports accounted for nearly two-thirds of Singapore’s aggregate carbon intensity, followed by private consumption and investment. At the sectoral level, the top three contributors were the petroleum, petrochemical, and land transport sectors. Improvements in emission intensity and final demand structure were major factors contributing to reductions in carbon intensity. Our study contributes to the literature in two aspects. Methodologically, it deals with embodied emission intensity and analyzes its changes from the demand perspective. This differs from most studies in the literature from the production perspective. Empirically, the findings and policy implications are unique as they are applicable to a major city. With urbanization taking place in many developing countries, cites’ role in emissions and environmental sustainability are growing in importance but not many in-depth analyses similar to our study have been reported.