Structure of the Global Virtual Carbon Network Revealing Important Sectors and Communities for Emission Reduction

Traditional production- and consumption-based accounting frameworks for carbon dioxide (CO2) emissions focus on the two ends of supply chains, treating intermediate sectors as a black box. Particular intermediate sectors can potentially be important for global mitigation of CO2 emissions, through improving productivity to reduce inputs from upstream suppliers, thus emissions from upstream sectors, while still fulfilling downstream demands. Identifying those important intermediate sectors requires opening the black box and treating the economy as an integrated system. This study constructs a global virtual carbon network for 2009 and identifies key sectors for reducing global CO2 emissions through improving productivity using network analysis techniques. We also identify 73 communities in the network in which sectors are more closely connected with one another than with sectors outside the community. Identifying communities helps in the understanding of potential impacts of sector-specific policy interventions through supply chains. The results offer additional insights that are not obviously visible in traditional input-output analysis.