A Multi-region Structural Decomposition Analysis of Global CO2 Emission Intensity

This paper studies changes in global and national CO2 emission intensities using the multi-region structural decomposition analysis (SDA) technique. Emission intensities such as the ratio of CO2 emissions to GDP have lately been widely used to characterize national emission performance. Meanwhile the impact of international trade has been found to be important in global emission accounting. It is therefore important to analyze changes in emission intensities by taking trade into consideration. In this study, we first propose two SDA models, one at the global level and the other at the country level, to quantify both the domestic and trade related effects on an intensity indicator. The models are then used to study changes in global and countries' CO2 emission intensities from 2000 to 2009. The results show that sectoral emission efficiency improvement was the main contributor to the slight decrease in global emission intensity during the period, while international trade marginally hampered improvement of global emission intensity. Comparisons of the performance between emerging economies and advanced economies reveal the importance of production structure and final demand structure in emission intensity reduction. The policy implications of the findings are presented.