Hybrid IO Analysis of CO2 Emissions: An Application to the Portuguese Economy
Pp. 65-95 (31)
Luis Cruz and Eduardo Barata
Since the late 1980s, global climate change issues gained an ever-growing attention. The seriousness of
the greenhouse effect is now widely recognized as one of the hottest topics in the world agenda. This poses
important challenges. For one, global warming is a serious threat, pushing a shift of our mindset from economic
growth to more eclectic approaches towards the sustainability of the resources base. Second, we lack effective
mechanisms for decision making and policy implementation that encompass the complex interactions between
environmental and economic activities.
The Leontief input-output model has been applied for macro environmental analysis since the 1970s. Using data
for the Portuguese economy, this paper explores an extended environmental input–output model to study
environment and economy interactions in order to support strategies that respect and promote a balanced
management of the dynamics between energy supply, environmental protection and economic growth.
Thus, from the empirical analysis of primary energy flows, sets of energy intensity coefficients by industry, as
well as the energy requirements attributable to given vectors of final demand, are estimated. Then, sources of
anthropogenic CO2 Portuguese emissions and the share of sectors in total emissions are identified, relating this
pollution with the use of fossil fuels. Besides, ‘CO2 responsibility’, which takes into account the CO2 content of
imports, is estimated. The sectoral CO2 emissions and CO2 responsibilities are compared and these two notions
are linked to foreign trade. Accordingly, a summary of the key lessons learned and a discussion of their policy
relevance will be offered.
Hybrid I-O Analysis; Energy Intensities; CO2 Emissions; CO2 Responsibility; Portugal.
GEMF – Faculty of Economics, University of Coimbra (Portugal).