Semi-closed input-output and structural decomposition analysis of embodied emissions and intensities

Bin Su and B.W. Ang

Energy Economics, 2025, vol. 149, issue C

Abstract: Input-output (I-O) analysis has been widely used in energy and emission studies, including in embodiment and intensity analyses. Most previous studies use the open I-O model (IOM) which does not account for household expenditure patterns within the system. When endogenizing the household sector, the semi-closed IOM provides feedback effects where the incomes generated by production are spent by households on goods and services. This will influence further production. Very few studies have compared the embodiment and aggregate embodied intensity (AEI) results obtained using the two different approaches, i.e., semi-closed IOM versus open IOM. None has dealt with the differences between the two IOM approaches in quantifying the drivers of embodiment and AEI changes. This paper proposes a systematic framework to study and compare their differences. An empirical study using China's latest datasets (2017 and 2020) is presented to reveal the scale of the differences at the final demand and sectoral levels. Implications of the findings and future research are discussed.

Keywords: Open input-output model; Semi-closed input-output model; Structural decomposition analysis; Embodied emissions; Aggregate embodied intensity (search for similar items in EconPapers)
JEL-codes: C67 P28 Q43 Q54 Q56 R15 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:149:y:2025:i:c:s014098832500547x

DOI: 10.1016/j.eneco.2025.108720

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