Use of nested multi-regional input-output analysis for the evaluation of subnational emission reduction policies: A case of Japanese prefectures

Many subnational regions around the world, in their own capacity for policy formulation and implementation, have set targets for net-zero carbon dioxide or greenhouse gas emissions. However, most targets do not consider consumption-based emissions, which include emissions generated outside their borders to produce the products they consume. It is partly due to methodological difficulties and data gaps that subnational governments often face but this situation could misguide their efforts in the face of the goal of reducing global emissions. To facilitate an understanding of consumption-based subnational carbon emissions and informed subnational policymaking, this study proposes a relatively simple and less data-intensive methodology for subnational consumption-based emission analysis. It uses a nested multi-regional input-output approach by combining a publicly available global multi-regional input-output table and a subnational input-output table, whose computation is repeated for multiple regions for comparison. A case study of three Japanese prefectures with different levels of renewable electricity consumption was conducted using the 2015 datasets. The results showed that two prefectures with similar socioeconomic conditions, except for their totally different renewable electricity ratios (90 % and 4.6 %), exhibited a 25 % difference (4.4- and 6.0-ton CO2) in per capita household consumption-based carbon dioxide emissions in 2015. Counterfactual policy scenarios were analyzed using the constructed models. Application of an increased renewable electricity scenario indicated that an approximate 10 % increase in the prefectural renewable electricity ratio could reduce household per capita consumption-based emissions by 151-179 kg CO2 in those prefectures. Consumption-based emissions disaggregated by product category indicated that increasing the renewable electricity ratio had significant consumption-based emission reduction effects on not only electricity itself but also on services, particularly commerce, hotel, and restaurant services. The potential impacts of changing renewable electricity ratios on consumption-based emissions were found to be high for products whose share in household spending on local products and electricity cost in their production was large. A scenario analysis of home electrification, assuming the total replacement of household fuel gases and kerosene with electricity, resulted in a modest consumption-based emission reduction potential of less than 10 % for a prefecture with a high renewable electricity ratio and even showed a slight emission increase for a prefecture with a low renewable electricity ratio. In using commonly available datasets without the need to model trade flows between subnational regions, this study's method could realistically be applied by subnational governments to estimate consumption-based emissions of their jurisdiction, compared with other regions, and analyze the potential effects of emission reduction policy scenarios. (c) 2023 Institution of Chemical Engineers. Published by Elsevier Ltd. All rights reserved.

Automated summary

Many subnational regions have set targets for net-zero carbon dioxide or greenhouse gas emissions, but most targets do not consider consumption-based emissions. This study proposes a simple methodology for subnational consumption-based emission analysis using a nested multi-regional input-output approach. A case study of three Japanese prefectures is conducted, showing that the renewable electricity ratio has a significant impact on per capita consumption-based emissions. Scenario analyses indicate the potential effects of increasing renewable electricity and home electrification on consumption-based emissions.