LMDI decomposition analysis of greenhouse gas emissions in the Korean manufacturing sector

Abstract

In this article, we decomposed Korean industrial manufacturing greenhouse gas (GHG) emissions using the log mean Divisia index (LMDI) method, both multiplicatively and additively. Changes in industrial CO2 emissions from 1991 to 2009 may be studied by quantifying the contributions from changes in five different factors: overall industrial activity (activity effect), industrial activity mix (structure effect), sectoral energy intensity (intensity effect), sectoral energy mix (energy-mix effect) and CO2 emission factors (emission-factor effect). The results indicate that the structure effect and intensity effect played roles in reducing GHG emissions, and the structure effect played a bigger role than the intensity effect. The energy-mix effect increased GHG emissions, and the emission-factor effect decreased GHG emissions. The time series analysis indicates that the GHG emission pattern was changed before and after the International Monetary Fund (IMF) regime in Korea. The structure effect and the intensity effect had contributed more in emission reductions after rather than before the IMF regime in Korea. The structure effect and intensity effect have been stimulated since the high oil price period after 2001.