Decomposition analysis of CO2 emissions from fuel combustion in selected countries

This article introduces an approach applicable to analysing different factors influencing elements relevant in sustainable development like environmental impacts. The approach is built on the idea of IPAT identity and it applies a chained two-factor decomposition technique for calculating numerical estimates for a larger set of contributing factors than traditionally done in applying decomposition analysis. The empirical example identifies six different meaningful contributing factors or 'driving forces' behind change in carbon dioxide emissions from fuel combustion. The factors include changes in (1) carbon intensity of energy supply, (2) efficiency of the energy transformation system, (3) energy intensity of the national economy, (4) economic growth in terms of labour productivity, (5) share of economically active population and (6) amount of population. The empirical analysis for the years 1990-2003 is carried out for the USA, Japan, China, India, Brazil and the European Union (EU-25) as a whole and for each Member State.