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We exploit a recently made available panel dataset of UK industry-level greenhouse gas emissions to understand the industrial origins of aggregate emission reduction. After reproducing and extending a number of facts gathered from the literature, we uncover a strong block of co-movement between service industries, which we explain by the way emissions are attributed to industries. To model this parsimoniously, we use a recently introduced block-level dynamic factor model, with which we find that industry-level emission reductions are mostly driven by their idiosyncratic components, with a substantial contribution of higher-level block components and a relatively small contribution of the global factor. Our results provide benchmarks for an emerging literature on business cycle frequency analysis of emissions, and shows that macro factors make limited contributions to declining emissions at the industry level, suggesting that industry-level policies and targets are appropriate.

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