Cross-country analysis of relationship between material input structures and consumption-based CO₂ emissions

This study focuses on the effects of changes in material and energy input structure on the consumption-based CO₂ emissions. Previous studies demonstrated the connection between domestic structural changes including the shift toward a service economy and the increase in greenhouse gas emissions embodied in consumptions of a specific country. This study is an important follow-up research that examines the environmental effects across countries and evaluates whether or not the development levels of countries can explain those environmental effects. Specifically, we employed a multiplicative structural decomposition analysis based on the World Input–Output Database during 1995–2008 and decomposed consumption-based CO₂ emissions of 40 nations into the following four inducement sources: (1) inputs from material goods (including energy) to material goods, (2) inputs from material goods to services, (3) inputs from services to material goods, and (4) inputs from services to services. The results from this paper is helpful for policymakers to identify the target segment of supply chain to reduce the domestic CO₂ emissions without lowering the level of the country’s production activities.