CO2 emissions from service sectors in Ecuador : an analysis using input-output subsystems

Ecuador is one of the most megadiverse countries in the world and a pioneer in establishing some regulations to take care of its environment. Despite this, its levels of pollution and environmental deterioration are higher than those of neighboring countries. A better understanding of the pollution channels of a subsystem such as services, which increasingly occupies a more relevant place in the economy and many of its activities tend to go unnoticed as a source of pollution, allows the development of mitigation strategies that could be analyzed and adopted for similar contexts. We estimated direct and indirect emissions for the 71 economic activities of Ecuador and applied an input-output subsystem analysis, breaking down the generation of total CO2 emissions (direct and indirect) of the 18 activities that make up the services subsystem into 6 sources. Total emissions of the services subsystem were a third of the emissions for the year 2018. Although it is known that transport is a well-known relevant actor in overall CO2 emissions, our decomposition provides a clearer view of the direct and indirect pollution channels of other relevant service sectors. We detect several service sectors with an insignificant level of direct CO2 emissions and a high level of total emissions. This is the case of trade services, real estate services, services provided by professionals, telecommunications or the government public administration. These sectors induce the generation of emissions from other sectors inside and outside the services subsystem. The results inform the design of policies to mitigate CO2 emissions in Ecuador.