The economic and environmental footprint of the EU economy: Global effects of a transition to services

We evaluate the implications of structural change towards services in the EU in terms of environmental pressures. vis à vis the changes in the distribution of employment and value added. To carry out this integrated assessment we use Environmentally Extended Multi Regional Input Output modelling applied to data from the World Input Output Database (WIOD). The results suggest that, when looking at direct emissions ("production perspective"), the service sectors is characterized by a lower emission intensity than the industrial sectors, but this gap is much smaller when considering also indirect emissions in a "vertically integrated" approach ("consumption perspective"). Moreover, changes in the production structure economy in absence of relevant changes in the composition of the final demand induce an increased reliance on environmental pressures, employment, and value added generated abroad. The EU is transferring worldwide more emissions that value added and employment.