Embodied CO2 emissions and efficiency of the service sector: Evidence from China

Numerous studies discuss energy consumption and carbon emissions in industrial sectors. However, studies of environmental problems caused indirectly by the development of the service sector have, until now, been rather limited. Using the input-output analysis and the three-stage data envelopment analysis (DEA) model, we propose an improved method for estimation of embodied CO2 emissions efficiency in the service sector, and apply it to provincial data in China. We observe that first, the service sector emitted a significant amount of embodied CO2; second, significant regional differences in CO2 emissions efficiency exist that, nevertheless, are consistent with the levels of regional economic development. Finally, we propose several policy implications for emissions reduction.