Industrial Structure and Source of Carbon Dioxide Emissions in East Asia: Estimation and Comparison

Abstract

This study estimates and compares carbon dioxide (CO2) emissions of three East Asian countries; China, Japan and South Korea by using the well-known input-output model. The differences in CO2 emissions between countries are then analyzed by a decomposition method. The sources of differences in CO2 emissions are attributed to various factors such as different fuel efficiency, production techniques, consumption patterns and the size of the economy. It is argued that an industrial sector with high total emission intensity (TEI) can reduce pollution at lower cost than others with low TEI, assuming that the reduction in emissions entails reduction in output. In this connection, China provides a challenging case for a potential regional joint effort towards the CO2 reduction, because her emissions are shown to be the largest, both in the absolute term and in terms of average TEI.