The role of energy policy on the decoupling processes in the European Union countries

Abstract

The study offers thorough analysis of the impact of the European Union (EU) energy policy on decoupling greenhouse gas (GHG) emissions from economic growth between 1996 and 2017. Two types of GHG measurements, production-based accounting (PBA) and consumption-based accounting (CBA), are used to account for the possible outsourcing with the Tapio framework. Five factors taken from the Log-Mean Divisia Index are considered in order to determine the main contributors of emission mitigation. The results demonstrate decoupling GHG emissions from economic growth in almost all countries, regardless of the type of GHG measurements. However, in the case of production-based emissions, the decoupling occurs faster. After 2005, when the EU launches its energy policy, the decoupling speeds up. LMDI results indicate that the improvements in energy intensity and the energy structure are the most significant drivers of GHG emissions reduction. There are differences between the reduction of the two types of GHG emissions and its determinants in old and new EU countries. In almost all EU countries the decoupling is linked to the EU energy policy but the reduction of GHG emissions partly comes at the expense of outsourcing, i.e. the relocation of emission-intensive industries to countries outside the EU.