The driving forces of changes in CO2 emissions in China: A structural decomposition analysis

Abstract

Understanding the drivers of changes in CO2 emissions is vital for a range of stakeholders. Hence, this paper explores the main drivers of CO2 emissions in China using structural decomposition analysis based on constant price and non-comparative input-output tables. The driving forces at both nationwide and industrial levels are divided into nine effects. To investigate the effects from an energy perspective, all nine effects are further decomposed into three kinds of fossil fuels. Our empirical results show that the energy intensity effect can significantly stimulate emission reduction. Though the energy structure effect is weak, the trend of which over time shows that the energy structure is shifting to low carbon. Additionally, among final demand effect, the urban consumption, investment, and export expansion effects predominantly overwhelm other effects and contribute significantly to CO2 emissions. Although the short term Leontief effects fluctuate greatly, the total Leontief effect in 1997-2010 reveals that it can significantly contribute to CO2 emissions. Finally, detailed and concrete policy implications for CO2 emission reduction are provided.