Estimating the mitigation potential of the Chinese service sector using embodied carbon emissions accounting

Abstract

It is universally recognized that direct carbon emissions based on energy consumption and industrial production lead to carbon leakage and inequality. This paper employs input–output analysis (IOA) and the hypothetical extraction method (HEM) to establish an embodied carbon analysis framework to resolve the above externalities. As a typical downstream consumption industry, the service sector has had very little work examining its embodied carbon transfer structure and related climate policies. In this paper, carbon flows of China's service sector between 1997 and 2015 are mapped and a scenario analysis is conducted that accounts for the service sector development plan and carbon emissions reduction targets. The results demonstrate that 13–19% of carbon flows in the Chinese economy are caused by the service sector's demand of other sectors. Controlling the industry scale and carbon intensity of its upstream industries effectively mitigates the dramatic growth of embodied carbon emissions in the service sector. The embodied carbon emissions accounting framework might provide new insights for the definition of emissions reduction responsibility on both a regional and sectoral scale. The further exploration of the service industry from this novel perspective will be helpful in realizing China's overall carbon emissions reduction goals.