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An analysis of CO2 emissions in Italy through the Macro Multiplier (MM) approach

Ali, Yousaf, Ciaschini, Maurizio, Socci, Claudio, Pretaroli, Rosita, Severini, Francesca
Journal of cleaner production 2017 v.149 pp. 238-250
carbon dioxide, climate, climate change, environmental policy, greenhouse gas emissions, greenhouse gases, industry, international agreements, multipliers, Italy
The issue of policy design into the environmental economic literature is becoming a crucial point especially for the relevance of its implication on international agreements for climate change and for the definition of climate actions against GHGs emissions. The identification of economic drivers accountable for the CO2 emissions, which represent the major part of GHGs emissions, represents a central topic on literature using Input-Output analysis. The paper proposes a methodological innovation on the study of suitable policy instrument against the raise of CO2emissions, which is based on the approach of the Macro Multipliers (MM) that leads with the recognition of the impact of all those industries responsible for CO2 emissions. From the policy perspective, the relevance of industries responsible for CO2 emissions is also analysed in this approach in which we introduce the target efficiency index and the control effectiveness index across industries. As part of final demand vector, each commodity has its own relevance, or effectiveness, in pursuing the attainment of the target vector. On the other hand as part of the target vectors, each industry emission has its own efficiency in being conveniently modified by changing the policy control vector. The results deriving from the MM approach demonstrate the possibility to overcome the limits of the linkages analysis. In particular, the set of information deriving from the target efficiency and the control effectiveness indices for industries allows designing environmental policies in a framework where economic aggregates are defined in value and physical units. Using the input-output table, this study investigates the impacts of industries activities on CO2 emission using the MM approach for the Italian economy.