Input–output analysis of CO2 emissions embodied in trade: The effects of spatial aggregation

Energy-related CO2 emissions embodied in international trade have been widely studied by researchers using the environmental input–output analysis framework. It is well known that both sector aggregation and spatial aggregation affect the results obtained in such studies. With regard to the latter, past studies are often conducted at the national level irrespective of country or economy size. For a large economy with the needed data, studies may be conducted at different levels of spatial aggregation. We examine this problem analytically by extending the work of Su et al. ([Su, B., Huang, H.C., Ang, B.W., Zhou, P., 2010. Input-output analysis of CO2 emissions embodied in trade: The effects of sector aggregation. Energy Economics 32 (1), 166–175.]) on sector aggregation. We present a numerical example using the data of China and by dividing the country into eight regions. It is found that the results are highly dependent on spatial aggregation. Our study shows that for a large country like China it is meaningful to look into the effect of spatial aggregation.