Decoupling economic growth from carbon dioxide emissions in China: A sectoral factor decomposition analysis

Abstract

China is facing the dilemma of how to coordinate economic development and carbon dioxide (CO2) emissions reduction. This paper investigates the decoupling effect of economic growth from CO2 emissions in China during the period 1992–2012. Using the Logarithmic Mean Divisia Index (LMDI) method, we decompose the driving forces of the decoupling of economic growth from CO2 emissions in China's five major economic sectors into several factors, and measure the contribution of each factor to the decoupling of China's overall economy from CO2 emissions. The results show that China performed the weak decoupling of economic growth from CO2 emissions during 1992–2012, and so did all its five major sectors. Such a state did not occur smoothly and presented five different stages. Energy intensity and economic activity level were the most important factors affecting the decoupling in China. Energy intensity decreased in all sectors, indicating a large acceleration for the sectoral decoupling states. This finding is applicable to process carbon intensity in industrial sector and energy emission factor in agricultural, industrial, construction, and service sectors. In terms of sectoral effects on the decoupling in China, industrial sector played a dominant role, while construction sector had the most marginal influence. The economic activity level and economic share of industrial sector exerted the most negative effects on the decoupling. The energy intensity of industrial sector played a key role in promoting the national decoupling state, while the energy emission factor of agricultural sector contributed the least.