Economic structure and strategies for greenhouse gas mitigation

Greenhouse gas (GHG) emission mitigation policy impacts the economic system directly in the short-term by altering relative prices and indirectly in the long-term by shifting the structure of the economy. There may also be adjustments to economic structure independent of policy intervention due to changes in population, consumption patterns, and global markets. The overall effectiveness of specific mitigation policy will partly depend on these indirect and exogenous changes to economic structure. This study develops a new measure linking economic development with its environmental effects. The technical cost of GHG mitigation under economic growth in an economy is calculated by combining traditional input-output (IO) analysis and a linear programming based sensitivity analysis. The approach is applied to Northern Ireland (NI), producing an isoemission matrix that maps emission-neutral expansion paths for the economy. The measurement provides an indicator of the demand for technical improvement to achieve GHG mitigation at a national or regional level. The flexibility and transparency of the approach make it useful for evaluating potential GHG mitigation strategies.