Decomposing industrial energy-Related CO2 emissions in Yunnan province, China: Switching to low-carbon economic growth

Abstract

As a less-developed province that has been chosen to be part of a low-carbon pilot project, Yunnan faces the challenge of maintaining rapid economic growth while reducing CO2 emissions. Understanding the drivers behind CO2 emission changes can help decouple economic growth from CO2 emissions. However, previous studies on the drivers of CO2 emissions in less-developed regions that focus on both production and final demand have been seldom conducted. In this study, a structural decomposition analysis-logarithmic mean Divisia index (SDA-LMDI) model was developed to find the drivers behind the CO2 emission changes during 1997-2012 in Yunnan, based on times series energy consumption and input-output data. The results demonstrated that the sharp rise in exports of high-carbon products from the metal processing and electricity sectors increased CO2 emissions, during 2002-2007. Although increased investments in the construction sector also increased CO2 emissions, during 2007-2012, the carbon intensity of Yunnan's economy decreased substantially because the province vigorously developed hydropower and improved energy efficiency in energy-intensive sectors. Construction investments not only carbonized the GDP composition, but also formed a carbon-intensive production structure because of high-carbon supply chains. To further mitigate CO2 emissions in Yunnan, measures should promote the development and application of clean energy and the formation of consumption-based economic growth.