Inter-sectoral carbon ties and final demand in a high climate risk country: The case of Pakistan

Abstract

The industrial carbon emissions of Pakistan, which is highly vulnerable to climate change, have increased rapidly since 1970. However, there is limited research on the industrial carbon links and final embedded emissions of Pakistan and other climate-vulnerable nations. This study aims to estimate the direct and indirect emissions from Pakistan’s industries, the embodied final emissions, and the magnitude of the final pull effects on intermediate industrial emissions. To do so, the study employs the input–output model and the modified hypothetical extraction method, and develops hypothetical extraction of final demand. The findings are as follows. The most carbon-intensive sector is Electricity, gas, and water, which directly emitted 53 million tons and exported 32 million tons of carbon. The Textiles and apparel sector is less intensive with approximately 20.4 million tons of backward emissions, making it the top CO2 importer. Households had the highest pull impact on the inter-sectoral carbon links of most industries. Moreover, propensity to consume, population, and per capita income were key factors in increasing indirect household emissions from 2005 to 2015. Production intensity had the highest negative effect on emissions. This study concludes that Pakistan should redistribute its mitigation burden among key industrial producers, industrial consumers, and affluent household consumers. Furthermore, efficient and smart reallocation of capital investment and expansion of its export base could help Pakistan to reduce the final pull effects of these two categories, mostly on backward industrial emissions. The estimation of intermediate and final emissions in this study could help to develop a targeted and collective accountability system for climate-vulnerable nations.