Multi-regional decomposition of direct and indirect carbon emissions in ASEAN

Abstract

As Association of Southeast Asian Nations (ASEAN) economies deepen their role in regional and global production networks, carbon responsibility is increasingly shared across production, consumption, and trade systems. This study assesses direct and indirect carbon emissions across nine ASEAN economies from 2017 to 2023 using an environmentally extended multi-regional input-output framework with Logarithmic Mean Divisia Index (LMDI)-based structural decomposition analysis (SDA). Direct, energy-related indirect, and supply chain-related emissions were quantified using Asian Development Bank multi-regional input-output tables and environmental satellite accounts. Emission changes were decomposed into emission intensity, economic system structure, final demand structure, and total final demand effects. Embodied carbon flow matrices traced carbon transfers through intermediate transactions, final demand, ASEAN economies, and the Rest of the World (RoW). Results show that direct emissions increased by 19.76% (2,363.10 to 2,829.95 MtCO₂e), while indirect emissions increased by 7.83% (4,003.85 to 4,317.47 MtCO₂e), with energy-related indirect emissions showing the highest growth rate among the indirect categories at 16.72% (1,176.48 to 1,373.17 MtCO₂e). LMDI-based SDA results indicate that emissions growth was mainly driven by global final demand expansion, while negative emission intensity effects partly offset emission increases in all three categories. Country-sector hotspots included Indonesia’s energy and mining sectors, and Vietnam’s manufacturing sector. Embodied carbon flow results identify manufacturing as the central carbon redistribution hub and energy as a major upstream source. National production chains dominated ASEAN embodied flows, while RoW-linked exchanges were larger than intra-ASEAN exchanges. These findings highlight the need for coordinated regional and country-specific strategies targeting cleaner energy systems, industrial networks, and material supply chains.

Keywords

Carbon footprint / climate change mitigation / value chain emissions / embodied carbon / emissions decomposition

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