Environmentally-extended input-output simulation for analyzing production-based and consumption-based industrial greenhouse gas mitigation policies

Abstract Industrial GHG mitigation policies are prevalent across the world to realize global greenhouse gas (GHG) emissions targets. It is essential to simulate the impacts of different policies on various industries in the socio-economic system to find out the most effective emission reduction pathways. In this study, an Environmentally-Extended Input-Output Simulation (EEIOS) model is developed to facilitate integrated GHG mitigation policy development for multiple industries from both production and consumption sides. In addition, a Production-Consumption Rate is proposed to reflect the differences between Production-Based Policies (PBP) and Consumption-Based Policies (CBP) for a certain industry, which further supports the optimized and systematic emission reduction strategy development. A special case study of the Province in Saskatchewan, Canada, is conducted to illustrate the applicability and superiority of the Environmentally-Extended Input-Output Simulation model. It is found that Production-Based Policies applied to primary industries will lead to larger GHG reductions, and that Consumption-Based Policies should be applied to industries that are located at the end of industrial chains. The results provide a solid scientific basis for supporting industrial greenhouse gas mitigation policy development for each industry and identifying the optimized emission reduction pathways for the entire socio-economic system.

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