Investigation for the Decomposition of Carbon Emissions in the USA with C-D Function and LMDI Methods

Rui Jiang, Rongrong Li and Qiuhong Wu
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Rui Jiang: School of Economics and Management, China University of Petroleum (East China), Qingdao 266580, China
Rongrong Li: School of Economics and Management, China University of Petroleum (East China), Qingdao 266580, China
Qiuhong Wu: School of Business Administration, Xinjiang University of Finance & Economics, No. 449, Middle Beijing Road, Urumqi, Xinjiang 830011, China

Sustainability, 2019, vol. 11, issue 2, 1-15

Abstract: Residual problems are one of the greatest challenges in developing new decomposition techniques, especially when combined with the Cobb–Douglas (C-D) production function and the Logarithmic Mean Divisia Index (LMDI) method. Although this combination technique can quantify more effects than LMDI alone, its decomposition result has residual value. We propose a new approach that can achieve non-residual decomposition by calculating the actual values of three key parameters. To test the proposed approach, we decomposed the carbon emissions in the United States to six driving factors: the labor input effect, the investment effect, the carbon coefficient effect, the energy structure effect, the energy intensity effect, and the technology state effect. The results illustrate that the sum of these factors is equivalent to the CO 2 emissions changes from t to t-1, thereby proving non-residual decomposition. Given that the proposed approach can achieve perfect decomposition, the proposed approach can be used more widely to investigate the effects of labor input, investment, and technology state on changes in energy and emission.

Keywords: combined decomposition technique; perfect decomposition; labor input; fixed asset investment (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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