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Driving Forces of CO2 Emissions in Emerging Countries: LMDI Decomposition Analysis on China and India’s Residential Sector

Yeongjun Yeo (), Dongnyok Shim (), Jeong-Dong Lee () and Jörn Altmann ()
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Yeongjun Yeo: College of Engineering, Seoul National University
Dongnyok Shim: College of Engineering, Seoul National University

No 2015128, TEMEP Discussion Papers from Seoul National University; Technology Management, Economics, and Policy Program (TEMEP)

Abstract: The main objective of this paper is to identify and analyze the key drivers behind changes of CO2 emissions in the residential sectors of the emerging economies, China and India. This paper also aims to draw policy implications in terms of finding challenges and opportunities to reduce residential CO2 emissions in both countries. For the analysis, we investigate to what extent changes in residential emissions are due to changes in energy emissions coefficients, energy consumption structure, energy intensity, households’ income, and population size. We decompose the changes in residential CO2 emissions in China and India into these five contributing factors from 1990 to 2011 by applying the Logarithmic Mean Divisia Index (LMDI) method. According to our results, the increase in per capita income level is the biggest contributor to the increase of residential CO2 emissions, while the energy intensity effect had the largest effect on CO2 emissions reduction in the residential sectors in both countries. This implies that investments for energy savings, technological improvements, and energy efficiency policies were effective in mitigating CO2 emissions. It is also found that the change in CO2 emission coefficients for fuels, which is the ratio of CO2 emissions arising from consumption of fuels to the consumption level slowed down the increase of residential emissions. In addition, results demonstrate that changes in the population and energy consumption structure drove the increase in CO2 emissions.

Keywords: CO2 Emissions; Emerging Economy; Residential Sector; Logarithmic Mean Divisia Index (LMDI) Method. (search for similar items in EconPapers)
JEL-codes: C02 C15 C43 C65 O32 O33 Q01 Q48 Q55 Q56 R11 R22 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2015-12, Revised 2015-12
New Economics Papers: this item is included in nep-ene, nep-env and nep-tra
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Citations: View citations in EconPapers (7) Track citations by RSS feed

Published in Sustainability, MDPI.

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