Key Factors Influencing the Achievement of Climate Neutrality Targets in the Manufacturing Industry: LMDI Decomposition Analysis

Kristiāna Dolge and Dagnija Blumberga
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Kristiāna Dolge: Institute of Energy Systems and Environment, Faculty of Electrical and Environmental Engineering, Riga Technical University, LV-1048 Riga, Latvia
Dagnija Blumberga: Institute of Energy Systems and Environment, Faculty of Electrical and Environmental Engineering, Riga Technical University, LV-1048 Riga, Latvia

Energies, 2021, vol. 14, issue 23, 1-23

Abstract: The manufacturing industry is often caught in the sustainability dilemma between economic growth targets and climate action plans. In this study, a Log-Mean Divisia Index (LMDI) decomposition analysis is applied to investigate how the amount of industrial energy-related CO 2 emissions in Latvia has changed in the period from 1995 to 2019. The change in aggregate energy-related CO 2 emissions in manufacturing industries is measured by five different factors: the industrial activity effect, structural change effect, energy intensity effect, fuel mix effect, and emission intensity effect. The decomposition analysis results showed that while there has been significant improvement in energy efficiency and decarbonization measures in industry, in recent years, the impact of the improvements has been largely offset by increased industrial activity in energy-intensive sectors such as wood processing and non-metallic mineral production. The results show that energy efficiency measures in industry contribute most to reducing carbon emissions. In the future, additional policies are needed to accelerate the deployment of clean energy and energy efficiency technologies.

Keywords: decomposition analysis; LMDI; CO 2 emissions; manufacturing industry; energy policy; sustainability (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (7)

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