Decomposition analysis of carbon dioxide emissions in Pakistan

Abstract

Energy related CO2 emissions are importantfactors responsible for greenhouse effect. Unprecedented increase in anthropogenicgas emissions in the recent decades have led to climatic changes. This study wasaimed to decompose the changes in CO2 emissions in Pakistanfor the time periods of 1990–2017. The log mean Divisia index was employed to findout changes in CO2 emissions into five factors such asactivity effect, structural effect, intensity effect, fuel-mix effect, and emissionsfactor effect. The analysis confirmed an upward trend of overall emissions of thecountry during the specified time period (1990–2017). Results of activity effect,structural effect and intensity effect were identified as the three major factorsresponsible for changes in overall CO2 emissions in thecountry. Among all effects, the activity effect was investigated as largestcontributor to overall changes in CO2 emissions level. Thestructural effect is positively affecting CO2 emissionsindicating a transition of economic activity towards more energy intensive sectors.However, intensity effect has negative relationship with emissions, which is a signof energy efficiency gains. Energy mix of the country comprises of fossil fuel inexcess of 80%. The findings suggest that policy makers should encourage thediversification of energy and output mix towards more energy efficient sub sectorsof the economy.