Impacts of growth of a service economy on CO2 emissions: Japan's case

The structural transition to a service economy has clearly contributed to decreasing direct (or territorial) greenhouse gas emissions. Nevertheless, the role of this structural transition on direct greenhouse gas emissions is not well understood quantitatively. This study applied the additive decomposition method and decomposed the change in CO2 emissions from domestic industries into five components: changes in the overall scale of the economy, changes in the industrial composition of the various economic sectors, energy intensity changes, changes in import composition, and changes in the import scale. The decomposition results show that during the 15-year period from 1990 to 2005, structural change effects under the domestic technology assumption (which include industrial composition effects, import scale effects, and import composition effects) totaled 35 Mt CO2, or 3 % of total CO2 emissions in 1990. It is concluded that the CO2 reduction due to the transition to a service economy was not negligible during 1990-2005 and that the structural transition to a service economy was much more important than the material dependence of service industries.