Material and Energy Dependence of Services and Its Implications for Climate Change

Abstract

As the services industry has grown and diversified, there has been a rapid rise in the share of energy and material costs in provision of services. As a result, services, which have traditionally been considered immaterial by their nature, are now absorbing substantial amounts of energy and material goods. By decomposing the CO 2 emissions embodied in material goods and services, this study quantitatively analyzes the implications of energy and materials consumption in services for the change in indirect CO 2 emissions by household consumers in Japan. The results show that the domestic CO 2 emissions associated with the energy and material goods absorbed by services through the supply chain increased consistently during the decade 1990-2000, thereby constituting a key element in the rise in CO 2 emissions due to household consumption. The energy and materials within the supply chain underlying services that have been identified as the main causes of this increase include electric power consumption, petroleum products, building renovation and repair, distribution of printed materials, plastic products and water, all of which are necessary to support the services in question. This study highlights the increasing importance of energy and materials consumption by services in the context of climate change policy.

Activity Sectors and Energy Intensity: Decomposition Analysis and Policy Implications for European Countries (1991–2005)

“…Finally, we must emphasize that the evolution of both sectors (the industry and the services) can be interrelated. Thus, that the changes in the efficiency component do not appear to be related with the tertiarization process can be related with those works of [28,29]. These works highlight that a shift to a service-oriented economy entails a decrease in energy and emissions intensity per unit of GDP, but an increase in overall energy/emissions in absolute terms.…”

“…Moreover, as pointed out by [28,29], the relationship found between the service sector size and the evolution of the energy efficiency component might be partially explained by the increased demand of industrial components by the service sector. Thus, to properly identify the reasons behind the evolution of the energy efficiency component, we need to better understand the relationship between the industry and the service sectors, which is clearly an important challenge of energy and climate policy in developed countries.…”

Impacts of Growth of a Service Economy on CO2 Emissions: Japan’s Case

“…Important studies on the relationship between the transition to a service economy and CO 2 emissions include those of Suh (2006) and Nansai et al (2009). Suh (2006) demonstrated that household consumption of services, excluding electric utilities and transportation services, accounts for 37.6 % of total industrial GHG emissions in the United States.…”

“…Suh (2006) demonstrated that household consumption of services, excluding electric utilities and transportation services, accounts for 37.6 % of total industrial GHG emissions in the United States. Nansai et al (2009) analyzed the factors governing life-cycle CO 2 emissions in Japanese service industries between the years 1990 and 2000 and concluded that increased inputs of energy and resources (including materials and components) led to significantly increased CO 2 emissions.…”

“…However, the studies of Suh (2006) and Nansai et al (2009) did not quantify the transition to a service economy in terms of the increasing industrial composition attributable to service industries and also did not analyze the impact of the transition to a service economy on production-based CO 2 emissions. 2 In addition, their studies did not argue that the transition to a service economy spurs an increase in imports of CO 2 -intensive commodities and that consequently this structural change contributes to global warming.…”