Structural path and decomposition analysis of aggregate embodied energy and emission intensities

Abstract

Aggregate energy and emission intensities have respectively been widely used to measure the overall performance of energy consumption and environmental pollution from the production perspective. Recently, Su and Ang (2017) propose the aggregate embodied intensity (AEI) indicator, defined as the ratio of embodied energy (or emissions) to embodied value added, to analyze the relationship between energy (or emissions) and value added or GDP from the demand perspective using the input-output (I-O) framework. Besides I-O analysis, structural path analysis (SPA) can be used to split the I-O analysis results into different layers to extract the important paths in terms of energy consumption and the resulting emissions. This paper incorporates the SPA technique with the AEI indicators and structural decomposition analysis (SDA) technique in the context of energy and emission studies. An empirical study using China's 2007 and 2012 datasets is presented to illustrate the AEI at the detailed transmission layers, show their relationships with the AEI indicators at different levels, and further investigate the driving forces to the changes of these AEI indicators. The proposed multi-level AEI framework can also be applied to other indicators and extended to multi-country/region analysis.