Inter-sectoral carbon ties and final demand

What is it about?

Pakistan is a highly vulnerable climate state. Two Mian parties are responsible for the carbon emissions of the nation, the industries and the final demand. This study presents a comprehensive estimate of the carbon linkages between Pakistan's industrial producers, consumers and end - users.

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Photo by Nazim Laghari on Unsplash

Photo by Nazim Laghari on Unsplash

Why is it important?

First, there is not much industrial carbon linkage and embodied emissions research available on inter-sectoral carbon ties and the role of final demand in developing and high climate risk countries, especially Pakistan. Secondly, there are several critical problems with the currently available literature on the topic of shared emissions responsibility: (1) most of these works have considered classical multiplier approach under the input–output model to estimate the inter-sectoral carbon relations; the classical multiplier approach is not very suitable to understand inter-sectoral ties as compared to the hypothetical extraction method (HEM); (2) these studies did not present the further decomposition of inter-sectoral carbon linkages in to internal, mixed, forward and backward which can only be estimated using MHEM; (3) there is no such mechanism available which calculates the final demand’s pull impacts on different intermediate linkages. In this regard, our study also introduces some methodological innovations to the industrial carbon linkages and final demand embodied literature; it develops a methodology which can measure the embodied impact of different categories of final demand on intermediate industrial carbon linkages, termed as the hypothetical extraction of final demand (HEOFD). Finally, to further guide targeted mitigation policy, the study employs the bi-polar structural decomposition analysis (SDA) to understand the main drivers of key final demand consumption.

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