Structural changes in carbon dioxide (CO2) emissions in the United Kingdom (UK): an emission multiplier product matrix (EMPM) approach

The increasing emissions of carbon dioxide (CO2) have been a major concern for most of the countries around the world; and as a result, every country is concerned about setting appropriate strategies to curtail it. This study proposes emission multiplier product matrix (EMPM), a novel approach that integrates CO2 emissions with input-output (I-O) tables for estimating pollution generated by inter-industry activities. In combination with structural decomposition analysis (SDA), the proposed EMPM can be used to measure emissions and identify its key drivers such as changes in technology and demand variations. Instead of generalised strategies, this approach is helpful in devising sector- specific pollution reduction strategies. The proposed methodology can also be applied at the sectoral, regional, national or global scale for identification of emissions sources. This study applies the proposed EMPM approach in combination with SDA to the UK’s economy by using I-O tables and emission data for the period 1995–2009. The study finds that, overall, UK’s carbon emission can be reduced through a disaggregated policy aiming to curtail industrial emissions and ensuring a more efficient transport sector.