Identification of the key sectors producing CO2 emissions in Malaysia: application of Input–Output analysis

An important challenge for many countries in the quest toward a low carbon economy is the identification of the “key” economic sectors that are responsible for CO2 emissions and what policy initiatives might be appropriate to address these emissions taking into account the role played by the different productive sectors and their relationship with other sectors and atmospheric pollution. This paper applies the Input–Output analysis to identify the key economic sectors producing CO2 emissions in Malaysia from the production perspective. It allows us to identify the sectors that deserve more consideration for mitigation policies. Results indicate the primary key sectors that demonstrated strong distributive and total effects were dominated by the energy industry and transportation sectors. The choice of demand-or supply-side measures to mitigate the CO2 emissions is deliberated at the end of the paper.