Policy implications from revealing consumption-based carbon footprint of major economic sectors in Japan

Abstract

In Japan, the Great East Earthquake caused numerous casualties and the subsequent suspension of operations at the Fukushima Daiichi Nuclear Power Plant continues to have an adverse impact on the national energy supply chain. The structural changes in energy supply have served to reinforce the importance of national emissions accounting in promoting overall CO2 reduction policies. However, traditional approaches for evaluating industrial emissions have been criticized for their production-based perspective, which fails to consider emissions embodied in sectoral indirect consumption. The purpose of this study is therefore to understand the sectoral emission transfer. By applying economic input-output tables, detailed sectoral economic interactions can be usefully identified. It was found that the emissions embodied in final consumption generated largely by households. Besides, although emission intensity of manufacturing sector is extremely high in direct emission, agriculture sector is found to exceed other sectors in indirect emission intensities. From the consumption-side, these findings strongly suggest that a high priority be given to mitigation efforts aimed at reducing residential consumption, whist policy priorities are expected to be located on agriculture-related sectors from production-side. The study hence provides insights into how we can better allocate emissions responsibility and set reduction priorities among major economic sectors.