Sources of Changes in Emissions from Energy: A Structural Decomposition Analysis

Abstract

This paper explores the anatomy of Danish energy consumption and emissions of carbon dioxide (CO2), sulphur dioxide (SO,) and nitrogen oxides (NO,). Changes in emissions between 1966 and 1988 were investigated using input-output structural decomposition analysis. Production-based emissions have undergone substantially greater changes than have private consumption emissions, and the increased level of final demand explains most of this development. Although the level of CO 2 emissions has risen proportionally to energy consumption, the NO, emissions level has increased relatively more and the SO, emissions level has declined considerably. There are several reasons for these developments, the main reason being changes in fuel mix in the energy-supply sector. Energy conservation has been implemented throughout the economy–with the important exception of transportation fuel. In most sectors and all demand categories, there has been a shift towards less energy-intensive composition of inputs and commodities. Both effects have considerably reduced emissions, but this has been outweighed by economic growth, which has required energy for further production throughout the whole period studied.