A revaluation of carbon intensity factors through the carbon decomposition approach in a developing economy

Abstract

The issue of climate change and its impact on every field of life has increased manifold during the 4.0 industrial revolution. We explore the driving factors of a sector-level carbon intensity which is essential to determine the targeted emissions reduction strategy in the developing economy. To execute this purpose, the study has been integrated by joining production and index decomposition with a spatial-temporal decomposition analysis to estimate the comparative performance of a sector. We cover nine significant factors for this purpose: the economic efficiency effect, the intensity effect, the gross domestic product gap effect, the structure effect, and the energy use efficiency effect. Moreover, this study utilized an updated set of data from three economic sectors, including the agriculture, services, and industrial sectors during 2006–2019 to estimate the energy-related carbon dioxide emission. According to our results based on the above classification, the performances of all these sectors are relatively either above, average, or below level. The economic and energy usage efficiency effects have a high association with one another, and both have above-average performance; however, the GDP gap effect has a lower performance. The service sector shows mixed results, whereas the performance of the agriculture sector remained unsatisfactory in this perspective.