Structural decomposition analysis of energy-related CO₂ emissions in China from 1997 to 2010

The energy-related CO₂ emissions in China have increased dramatically from 3384 to 8333 × 10⁶ t during the last decade. To interpret these drastic changes, we undertake a structural decomposition analysis to decompose the changes in CO₂ emissions from 1997 to 2010 into the following six driving forces: emission coefficient, energy intensity, Leontief, sectoral structure, demand allocation (the shares of consumption, investments, and exports in final demand), and final demand effects. The results show that declines in energy intensity had a decrease impact on CO₂ emissions during the studied period. Changes in the relative importance of intermediate production in total output (the Leontief effect) contributed to decrease CO₂ emissions in the 2000–2002 period and to increase emissions in the other periods. The most important driver behind the steady increase in CO₂ emissions is the large increase in final demand. A further analysis at the sectoral level revealed differences and fluctuations between sectors. Energy intensity fell most strongly in the electric power sector and the coking, gas, and petroleum production sector (two energy-intensive sectors). The shift toward exports and investment increased CO₂ emissions (demand allocation effect). Part of the increases in CO₂ emissions thus stem from production activities for consumption activities elsewhere.