CO2 mitigation potentials in manufacturing sectors of 26 countries

Abstract

This paper combines data envelopment analysis (DEA) and index decomposition analysis (IDA) and develops a new analysis framework to estimate CO2 mitigation potentials and investigate changes in the potentials of countries identified as inefficient decision making units. The proposed framework is applied to four large CO2 emitting manufacturing sectors (CHEMICAL, METAL, MINERAL, and PAPER sectors) between 2008 and 2014. From the potential estimation, the results suggest that significant CO2 reduction potentials exist in all four of these manufacturing sectors across 26 countries in 2014: 1139Mt-CO2, 1096Mt-CO2, 171Mt-CO2, and 322Mt-CO2, respectively. The decomposition results show that carbon factor and energy intensity change decrease the CO2 reduction potential (i.e., desirable effect), whereas energy saving potential ratio increases the potential (i.e., undesirable effect) during the study period. The efficiency improvement priority for CO2 mitigation is discussed from two perspectives: the size of the potential and the transition of each contributory factor to the potential over time.