A cross-country assessment of energy and CO₂ emission: An index decomposition approach

Abstract

As the threat of climate change becomes increasingly acknowledged, it becomes more evident that past and current unsustainable energy consumption patterns cannot be pursued or maintained. In order to address this challenging goal for policy makers across the globe, development of decomposition techniques have been widely undertaken, regarding both variations in energy and CO2 emissions. This study aims to promote a cross-country assessment of main energy-related emission drivers, resorting to an approach that diferenciates the contribution of RES and nuclear energy for overall carbon emissions. It resorts to a Log-Mean Divisia Index (LMDI) decomposition approach to enable disaggregation of Kaya identity function into main energy-related emission drivers. As main common emission drivers, energy intensity (Cint), affluence (Cypc) and penetration of RES (Crepe) constitute areas that require a more immediate action by energy policy decision makers. Thus, “extended” decomposition approach has enabled to identify key drivers for CO2 emissions, accounting for the contribution of all fuel alternatives – both renewable and non-renewable, including nuclear energy.