Multiplier Effects of Energy Consumption and CO2 Emissions by Input-Output Analysis in South Africa

Abstract

ABSTRACTThis paper analyzed the energy consumption and CO2 emission from 18 industrial sectors, and also evaluated the direct and indirect energy consumption and CO2 emission of changes in the final demand of South Africa’s (SA) economy. To accomplish this goal, the input-output linkage and multiplier methods have been applied to investigate the interconnectedness of the 18 sectors’ input-output tables for the years 1995, 2000, 2005, 2010 and 2012, and to measure their total impact of energy commodity input coefficients and CO2 emissions output coefficients for the year 2012. Results revealed that the electricity sector has a weak linkage with others sectors, which means it is mostly independent of other sectors. In another words, it does not induce and enable economic growth. Moreover, two sectors, such as Chemical and Petrochemical Industries and Basic Metals, were found as key sectors in SA’s economy in 1995, 2000 and 2012. In 2005 and 2010, only Chemical and Petrochemical Industries was the most important sector in SA. Additionally, Commercial and Public Services was the strongest forward linkage sector in SA. Our findings also showed that the electricity sector was the main direct monetary energy consumer and CO2 emitter, and therefore the most dominant source in terms of energy and CO2 intensities among all the 18 sectors in SA. Furthermore, our investigation of the direct and indirect effects on energy consumption and CO2 emissions indicated that both total of direct energy consumption and CO2 emissions were higher than both total indirect energy consumption and CO2 emissions. Finally, some potential suggestions on reducing the energy consumption and CO2 emissions deduced from this study are discussed.