Decomposition analysis of carbon dioxide emissions in Pakistan

Abstract

Energy related CO2 emissions are important factors responsible for greenhouse effect. Unprecedented increase in anthropogenic gas emissions in the recent decades have led to climatic changes. This study was aimed to decompose the changes in CO2 emissions in Pakistan for the time periods of 1990–2017. The log mean Divisia index was employed to find out changes in CO2 emissions into five factors such as activity effect, structural effect, intensity effect, fuel-mix effect, and emissions factor effect. The analysis confirmed an upward trend of overall emissions of the country during the specified time period (1990–2017). Results of activity effect, structural effect and intensity effect were identified as the three major factors responsible for changes in overall CO2 emissions in the country. Among all effects, the activity effect was investigated as largest contributor to overall changes in CO2 emissions level. The structural effect is positively affecting CO2 emissions indicating a transition of economic activity towards more energy intensive sectors. However, intensity effect has negative relationship with emissions, which is a sign of energy efficiency gains. Energy mix of the country comprises of fossil fuel in excess of 80%. The findings suggest that policy makers should encourage the diversification of energy and output mix towards more energy efficient sub sectors of the economy.