What drives CO2 emissions from China's civil aviation? An exploration using a new generalized PDA method

Understanding the main drivers contributing to the increased CO2 emitted by airlines can inform carbon-reduction policies for the civil aviation sector. Production decomposition analysis (PDA) is a theoretical tool widely used to investigate the factors influencing changes in CO2 emissions. Instead of the standard constant returns to scale assumption, the study proposes a new generalized PDA method that considers the influence of changes in scale efficiency. The study used a panel data set for China's airlines during the period of 2007-2013 to conduct an empirical analysis and generate meaningful results. First, it was found that changes in Revenue Ton Kilometers is the largest factor contributing to increased civil aviation CO2 emissions. Second, changes in potential energy intensity play a dominant role in decreasing CO2 emissions for most airlines. Third, changes in production technology effects exert a relatively small influence on CO2 emissions, and the effect of scale efficiency change positively contributes to curbing CO2 emissions. Based on the PDA analysis, we propose policy implications related to civil aviation of China.