The objective of this paper is to identify the key sector of CO2 emissions in the production sectors of Indonesia using input-output analysis. CO2 emissions are one of the major contributors of climate change and global warming. Indonesia, as one of the emerging market economies, is accelerating its development and as a result, manufacturing sectors have developed rapidly. Most of the energy used in these sectors comes from non-renewable energy such as oil and coal. However, there is limited knowledge and details of which sectors are contributing high CO2 emissions and how sensitive they are to income change. The method used for this study looks at the supply perspective which can measure the impact of an increase in the value added of different productive sectors on total CO2 emissions. It can also identify the productive sectors responsible for the increase in CO2 emissions when there is an increase in the value added of the economy. The data used are based on Input-Output Energy Tables of 1990, 1995 and 2010. During the 15 years of 1995-2010, the contribution of CO2 emissions in the ten key sectors increased significantly from 39.57% of total emissions in 1995 to 89.75% of total emissions in 2010. During these periods, the trend shows that three sectors are still in the ten most sensitive sectors in CO2 emissions due to income change, crude oil and natural gas, coal and petroleum refinery products. The implication of the results of this study is to make appropriate policy for reducing CO2 emissions by using the most efficient technology in those sensitive manufacturing sectors. With regard to this phenomenon, fiscal incentives and disincentives might be used to drive business community in manufacturing sectors to use the most efficient energy systems and low carbon energy sources.
|International Journal Sustainable Future for Human Security
|Published - 5 Dec 2017
- CO2 emission, Key productive sector, Inputoutput analysis