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Multiplicative structural decomposition analysis of aggregate embodied energy and emission intensities

Bin Su and B.W. Ang

Energy Economics, 2017, vol. 65, issue C, 137-147

Abstract: Aggregate intensity indicators, such as the ratio of a country's energy and emissions to its GDP, are often used by researchers and policymakers to study energy and environmental performance. This paper analyzes the relationship between energy (or emissions) and value added (or GDP) from a different viewpoint, namely from the demand rather than the production perspective, using the input–output (I–O) framework. The aggregate embodied intensity (AEI), defined as the ratio of embodied energy (or emissions) to embodied value added, can be defined at the aggregate, final demand category and sectoral levels. The total aggregate intensity can be presented as a weighted sum of the AEIs at the final demand category or sectoral level. Changes of the AEI at different levels can be decomposed to identify the driving forces using multiplicative SDA. A study using the latest 2007 and 2012 datasets of China indicates that (a) its aggregate intensity of CO2 emissions was mainly determined by the AEI in investment and (b) the emission intensity effect generally contributed the most to the AEI ratio changes at different levels. The proposed framework can be applied to other aggregate intensity indicators and extended to multi-country/region analysis.

Keywords: Aggregate embodied intensity; Input–output analysis; Structural decomposition analysis; Energy consumption; Carbon emissions; China (search for similar items in EconPapers)
JEL-codes: C67 P28 Q43 Q54 Q56 R15 (search for similar items in EconPapers)
Date: 2017
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Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

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