Exploring change in China's carbon intensity: A decomposition approach

Abstract

This paper aims to explore the change of CO2 intensity in China at both national and provincial levels. To serve this purpose, we introduce a decomposition model which integrates the merits of index decomposition analysis and production-theoretical decomposition analysis. Based on the decomposition, we also estimate the potential reduction of CO2 intensity for China and its provinces. Using a panel data set including China's 30 provinces during the period of 2006-2012, the empirical analysis is conducted and meaningful results are obtained. First, the potential energy intensity change was the dominant driving factor for the decrease of CO2 intensity, which contributed to a total reduction of 19.8%. Second, the energy efficiency change and the CO2 emission factor change also play positive roles in the CO2 intensity reduction for most provinces. Third, provinces in the western area generally showed a relatively large potential reduction in CO2 intensity, while those in the eastern area only demonstrated a small reduction.