Drivers of greenhouse gas emissions in the Baltic States: A structural decomposition analysis

- The Baltic States have decoupled growth of GDP from CO2 emissions.
- The main driver for increasing carbon emissions has been consumption growth.
- Emissions are mainly balanced by efficiency and structural change.
- A low carbon strategy needs to aim beyond efficiency improvements.

Since the mid-1990s three Baltic States have significantly increased their per capita gross domestic product (GDP) and at the same time have managed to keep the CO2 equivalent (CO2e) emissions low. We used structural decomposition analysis to identify the drivers of change for CO2e emissions in these countries between 1995 and 2009, a period that includes the collapse of the Soviet Union, restructuring and economic growth and the great recession. The results show that final demand has been the main driving force for increasing emissions in the Baltic States and would have caused an 80%, 64% and 143% emission increase in Estonia, Latvia and Lithuania, respectively, all other factors kept constant. This increase has been partly offset by a declining emission intensity of the economy, especially in Latvia and Lithuania; whereas in Estonia, which has one of the highest emission intensities in Europe, a shift in consumption patterns towards low carbon consumption items and a decarbonizing economic structure were the main balancing factors. It is likely that the Baltic States will experience a continuation of economic growth given their relatively low per capita GDP, which is less than half of the European Union average thus adequate carbon policies are paramount.