System-Critical Sectors for Decarbonisation and Mineral Security: An input-output study of Australian emissions

This study examines the structure and transmission of embodied greenhouse gas emissions in the Australian economy over the 2007/08–2022/23 period using an integrated input-output framework. It combines emissions multiplier analysis with partial hypothetical extraction method (PHEM) to identify system-critical sectors and quantify upstream (supplier-side) and downstream (consumer-side) emissions reduction potentials. Emissions multiplier analysis reveals that electricity supply, agriculture, coal and oil and gas extraction, basic metals, and related manufacturing sectors exhibit strong upstream and downstream linkages, acting as central hubs for emissions propagation across the economy. PHEM results demonstrate that emissions reductions are highly non-linear and asymmetric across sectors. Electricity supply accounts for around two-thirds of total upstream and downstream emissions reduction potential when the inputs or outputs of nine focal sectors are partially extracted, while agriculture and heavy industry act as secondary transmission channels. Approximately 86% of total emissions reductions are captured by this small group of sectors, indicating a high degree of structural concentration. Historical trends further show uneven decarbonisation progress, with substantial emissions-intensity reductions in agriculture and selected manufacturing activities, but persistent rigidity in fossil-fuel extraction and transport. Based on these results, the study demonstrates the value of integrating mineral security with industrial policy to achieve dual objectives of decarbonisation and human development through target economic sectors.