Leading Sectors and Low Carbon Development: An Approach of Environmentally-Extended Input-Output Table BPS, IPB University
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climate change, emissions, input-output, leading sector, low carbon
Abstract
Climate change issues have become a consideration in Indonesia due to the trade-off between economic development and environmental conservation. However, studies that incorporate environmental aspects into economic models are still limited. This study aims to develop the Environmentally-Extended Input-Output Table (EE-IOT) and determine the leading sectors in the Indonesian economy by considering greenhouse gas emissions as environmental pressures. EE-IOT is built in the form of Single-Region I-O. The result shows that the most direct CO2 emissions are produced by productive sectors and the rest from household consumption. Based on the leading sector analysis, the manufacturing of Food and Beverages Products is the leading sector with low CO2 emissions. Moreover, the sector with the highest output multiplier and relatively low CO2 multiplier is Food and Beverage Services. Meanwhile, Animal Productions has the lowest CO2 multiplier and high output multiplier. However, the development of these leading sectors cannot stand alone because it will have linkages with other sectors regarding inputs and outputs. After all, these supporting sectors will produce CO2 emissions as well. Therefore, with a low-emission approach, the government needs additional efforts to encourage these supporting sectors, such as energy, transportation, agriculture, and forestry.
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