EFFECTS OF SECTOR AGGREGATION ON CO₂ MULTIPLIERS IN MULTIREGIONAL INPUT-OUTPUT ANALYSES

The past few years have seen the emergence of several global multiregional input-output (MRIO) databases. Due to the cost and complexity of developing such extensive tables, industry sectors are generally represented at a rather aggregate level. Currently, one of the most important applications of input-output analysis is environmental assessments, for which highly aggregate sectors may not be sufficient to yield accurate results. We experiment with four of the most important global MRIO systems available, analyzing the sensitivity of a set of aggregate CO₂ multipliers to aggregations in the MRIO tables used to calculate them. Across databases, we find (a) significant sensitivity to background system detail and (b) that sub-sectors contained within the same aggregate MRIO sector may exhibit highly different carbon multipliers. We conclude that the additional information provided by the extra sector detail may warrant the additional costs of compilation, due to the heterogeneous nature of economic sectors in terms of their environmental characteristics.