Decoupling or Upstream Dispersion of CO2 Emissions? A Subsystem Analysis of Global High-Skilled Service Sectors for the Years 1995 to 2009

Abstract

I study global CO2 emissions of the service sector with a high share of college-educated workers within an Input-Output Subsystem Analysis for the years 1995-2009. While the share of production-based emissions of high-skilled service sectors is rather small, a footprint analysis reveals that the emission share of those sectors is considerably higher by using consumption-based accounting (about 17.7% of total emissions). The subsystem analysis offers a closer look on the origins of carbon intensive goods, necessary to meet consumption in high-skilled service sectors, by disentangling the supply chain in various channels. I find that the emissions embodied in intermediate inputs from the electricity sector are the most important component of the CO2 footprint in those branches. A structural decomposition analysis (SDA) is conducted in order to obtain major drivers of changes in emissions of input factors. The increasing global demand of such services is the main driver of emission growth in those sectors. Interestingly, also the structure of intermediate inputs plays an important role for an increasing footprint.