Technology determinants of carbon emissions from demand and supply perspectives

Abstract

With the support of the Climamodel-SEJ511 project funded by PAIDI, Junta de Andalucía, Spain as well as the support of the Severo Ochoa Program for Centers of excellence in R&D grant CEX2019-00915-S to the Barcelona School of Economics.

We study the role that the productive structure plays in determining carbon dioxide (CO2) emissions by industry. Specifically, we distinguish and isolate the interdependencies originating from the structure of the demand for inputs from those resulting from the supply structure. This separation has the advantage of enabling a better identification of the causal origin of emissions and allows the establishment of a catalog of industries based on their characteristics as demanders or suppliers of inputs. This information, linked to the different nature of demand or supply, can be relevant for designing more effective emission containment measures. The empirical basis of the analysis utilizes input-output data for Spain in 2020, while the methodological platform is an adaptation of the hypothetical extraction method (HEM).