Identifying Key Drivers of Carbon Intensity in EU Sectors: Insights from Panel Regression

Dragan Crnogorac ()
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Dragan Crnogorac: School of Economics and Business, University of Ljubljana

No 14516478, Proceedings of Economics and Finance Conferences from International Institute of Social and Economic Sciences

Abstract: This paper investigates the determinants of carbon intensity across various economic sectors in the European Union, focusing on the period that already considers transition policies under the Paris Agreement and the Fit-for-55 initiative. As sectors exhibit diverging emission levels and transition policy implications, understanding the factors influencing carbon intensity has become increasingly relevant. We employ a panel regression analysis using data from 2014 to 2022, examining variables such as brown energy consumption share, total factor productivity, gross value added, employment metrics, energy prices, and environmental taxes. Our findings reveal that carbon intensity is influenced by a complex interplay of factors, with significant variations across sectors. Notably, sectors with high reliance on brown energy show a stronger correlation with carbon intensity levels. The results underscore the necessity for tailored transition policies that consider sector-specific characteristics to effectively reduce carbon emissions within the EU. Furthermore, the study highlights the importance of integrating economic and environmental policies to foster a sustainable transition, providing valuable insights for policymakers aiming to achieve climate targets.

Keywords: Carbon Intensity; Economic Sectors; Panel Regression Analysis; GMM; EU Climate Policies; Fit-for-55 Initiative; Brown Energy Consumption; Total Factor Productivity; Sector-Specific Transition Policies (search for similar items in EconPapers)
JEL-codes: C23 Q50 Q54 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2024-10
New Economics Papers: this item is included in nep-eec, nep-eff, nep-ene and nep-env
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Published in Proceedings of the Proceedings of the International Conference on Economics, Finance & Business, Prague, Oct 2024, pages 36-46

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Persistent link: https://EconPapers.repec.org/RePEc:sek:iefpro:14516478

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