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Decomposing the influencing factors of industrial carbon emissions in China using the logarithmic mean divisia index method

Author(s): Xiaoli Liu, Jinrong Zhu

Decomposition analysis has been popular in the study on influencing factors of industrial carbon emissions(ICE). This paper analyzes the change of sectoral CO2 emissions fromthe three main industries in China over the period 1980-2009 based on the logarithmic mean divisia index (LMDI) method. The research shows that economic activity effect is the main influence factor for ICE increase inChina over the entire period, The decline in energy intensity and the adjustment of energy and change in the CO2 emission coefficient are major determinants for reduction of ICE, with the former alone accounting for 85%of the reduction. However, the change of industrial structure exhibit positive effect to the CO2 increase. The results indicate that China has made a significant contribution to reducing global CO2 emissions by decreasing its energy intensity. Moreover, according to the situation of China, this paper analyzed the mechanismof CO2 emission changes and puts forward the pressure-driven environment protection model.

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