Driving forces of China's multisector CO2 emissions: a Log-Mean Divisia Index decomposition.

Abstract

To figure out which factor contributes more on carbon emissions caused by energy consumption, this research took multisector analysis based on the Log-Mean Divisia Index Method (LMDI) and decoupling theory to assess the driving factors of carbon dioxide (CO2) emissions in China's six sectors from 2003 to 2016. Our empirical results reveal that China's economy can be divided as three decoupling stages and exhibited a distinct tendency toward strong decoupling with a turning point in 2008. Thus, we discuss the impact of 2008 economic crisis on carbon emissions based on decomposition results. The empirical results of our study show the following five conclusions. (1) Most sectors in China are in weak decoupling state due to the inhibition of energy intensity on carbon emissions. (2) Different factors contribute differently to reducing emissions in different sectors, economic output has the most prominent effect, followed by energy intensity and population scale. (3) China's current carbon emission reduction measures benefit more on energy efficiency. (4) The economic crisis has greatly reduced energy efficiency and has no significant impact on other factors. (5) If all industries adjust their energy mix, carbon emissions in China can be reduced by almost 17% every year.