Decomposition analysis from demand services to material production: The case of CO2 emissions from steel produced for automobiles in Mexico

According to the Fifth Assessment Report of the Intergovernmental Panel of Climate Change, several mitigation strategies for the industrial sector are needed to achieve global mitigation scenarios that include: carbon intensity, energy intensity, material intensity, product-service intensity, and the global demand for services. Under this contextual, this paper presents a decomposition analysis of energy related carbon dioxide emissions from the steel produced to manufacture new automobiles. The novelty of this analysis is that it links energy related carbon dioxide emissions from service demand to material production, breaking changes in demand for services measured as passenger-kilometers driven by new automobiles either for replacement or for new demand; steel content in new automobiles (material intensity); production process (structure); final energy intensity; and carbon intensity. The study boundaries include direct and indirect steel imports (contained in automobile imports). This analysis is applied to the Mexican case from 1993 to 2011. The results show that an increase in the pass-km followed by the growth in the vehicle size is the most important factors influencing carbon dioxide emissions. The rise of fuels with higher carbon contents in countries that export vehicles and steel to Mexico is also an important variable that had increased emissions. A projection for CO2 emissions for 2025 was developed to understand the significance of the different variables in the reduction of CO2 emissions related to the steel production for new automobiles.