Industrial CO2 emissions in China based on the hypothetical extraction method: Linkage analysis

Fossil fuel-related CO2 emissions are regarded as the primary sources of global climate change. Unlike direct CO2 emissions for each sector, CO2 emissions associated with complex linkages among sectors are usually ignored. We integrated the input–output analysis with the hypothetical extraction method to uncover the in-depth characteristics of the inter-sectoral linkages of CO2 emissions. Based on China's 2007 data, this paper compared the output and demand emissions of CO2 among eight blocks. The difference between the demand and output emissions of a block indicates that CO2 is transferred from one block to another. Among the sectors analyzed in this study, the Energy industry block has the greatest CO2 emissions with the Technology industry, Construction and Service blocks as its emission's primary destinations. Low-carbon industries that have lower direct CO2 emissions are deeply anchored to high-carbon ones. If no effective measures are taken to limit final demand emissions or adjust energy structure, shifting to an economy that is low-carbon industries oriented would entail a decrease in CO2 emission intensity per unit GDP but an increase in overall CO2 emissions in absolute terms. The results are discussed in the context of climate-change policy.