International inequality in CO2 emissions: A new factorial decomposition based on Kaya factors

In this paper, we analyze the determinants of inequality in the global distribution of CO2 emissions across the regions considered by the International Energy Agency during the period 1990-2010. The inequality analysis is carried out using a factorial decomposition of the second Theil index of inequality. Specifically, based on Kaya factors, CO2 emissions by active population are decomposed into four factors: carbon intensity of electricity production, electricity intensity of GDP, economic growth in terms of labour productivity and employment rate. The results show that global inequality in CO2 emissions by active population declined by 22 percent between 1990 and 2010, where the economic growth in terms of labour productivity is the main item responsible for the whole inequality value. Then, a second decomposition by multiplying factors for analyzing the within- and the between-group inequality components is described. In relation to the study of inequality by population groups, it was found that the within-group inequality component had been the main contributor to the whole inequality during all the period. Finally, some economic policy implications are discussed.