Decomposition of energy-induced CO2 emissions in manufacturing

This paper presents two general methods for decomposing energy-induced carbon dioxide (CO2) emissions in the manufacturing industry based on the Divisia index approach. Changes in the aggregate CO2 intensity are distributed among four causal factors, namely fuel CO2 emission coefficients, manufacturing production structure, fuel shares and sectoral energy intensities. We describe the basic features of the methodology and the information it provides. We then use four specific methods to decompose changes in the aggregate CO2 intensities in China, South Korea and Taiwan. The results obtained show that the intensity effect has the largest impact on the changes in the aggregate CO2 intensities in the three economies.