K. Liaskas et al. r Energy Economics 22 2000 383]394 385
and the new question raised is how one can achieve the separation of greenhouse gases emissions from both economic growth and energy consumption.
As a response to the new policy needs, decomposition analysis has been ex- tended in order to identify the factors influencing changes in greenhouse gases
Ž .
emissions and in particular in carbon dioxide CO which is the major contributor
2
to the greenhouse effect. In the literature there are mostly applications of input]output based techniques which have been modified by including the emis-
Ž sion factors associated to the different energy flows through the economy Casler
. Ž
. and Rose, 1998; Chang and Lin, 1998 . In addition, Greening et al. 1998 have
used the Divisia approach in a cross-national comparison of manufacturing CO
2
emissions in 10 OECD countries. The purpose of this paper is to make such an extension to the algebraic
Ž .
disaggregation method proposed by Park 1992 and to proceed to a cross-national comparison of the factors that have influenced CO emissions generated in the
2
Ž .
industrial sector of European Union EU countries. The analytical procedure followed is analytically described in Section 2. Data on CO emissions for the time
2
periods 1973]1983 and 1983]1993 are given and the obtained results are presented and discussed. Some concluding remarks are included in Section 4.
2. Decomposition method
The approach applied for decomposing changes in industrial carbon dioxide emissions into distinct effects of specific factors relies on a series of simple
algebraic calculations derived from Park’s method and uses as much as possible the same symbols. For each country the following input data are used:
E s total industrial energy consumption in period t;
t
Ž .
P s total industrial output in constant prices manufacturing value-added in
t
period t; E s i
th industrial branch energy consumption in period t; and
i t
P s i th industrial branch output in constant prices in period t.
i t
From the above definition it results that:
m
Ž . E s
E 1
Ý
t i t
is 1
m
Ž . P s
P 2
Ý
t i t
is 1
with m s the number of industrial branches. Energy consumption is translated into CO emissions by taking into account the
2
emission factors characterizing each fuel:
K. Liaskas et al. r Energy Economics 22 2000 383]394 386
F
j j
Ž . C s E ?
ef ? s 3
Ý
t t
t
js 1
F
j j
Ž . C s E ?
ef ? s 4
Ý
i t i t
i t
js 1
where C s
total industrial CO emissions in physical units in period t;
t 2
ef
j
s the emission factor of fuel j;
s
j
s the share of fuel j in total industrial energy consumption in period t;
t
C s i th industrial branch CO emissions in physical units in period t;
i t 2
s
j
s the share of fuel j in ith industrial branch’s energy consumption in period
i t
t ; and
F s the number of different fuels.
The energy intensity and the CO emission intensity of ith branch at period t
2
are defined as follows: Ž .
e s E rP 5
i t i t
i t
Ž . c s C rP
6
i t i t
i t
Ž .
A change in the total industrial emissions of CO between a base period t s 0
2
Ž .
and a later period t s n is stated as:
m m
Ž . D
C s C y C s C y
C 7
Ý Ý
n i n
i
is 1
is 1
Ž . Replacing C
and C from Eq. 4 :
i n i
m F
m F
j j
j j
Ž . D
C s C y C s E ?
ef ? s y E ?
ef ? s 8
Ý Ý
Ý Ý
n i n
i n i
i
is 1
js 1
is 1
js 1
Ž . Then, E and E are replaced using Eq. 5 :
i n i
m F
m F
j j
j j
Ž . D
C s P ? e ?
ef ? s y P ? e ?
ef ? s 9
Ý Ý
Ý Ý
i n i n
i n i
i i
is 1
js 1
is 1
js 1
The share of each industrial branch on the total industrial output is given by the ratio:
Ž .
a s
P r P 10
i t i t
t
Ž . Ž
. Replacing P in Eq. 9 using Eq. 10 we result in:
i t
K. Liaskas et al. r Energy Economics 22 2000 383]394 387
m F
m F
j j
j j
Ž .
D C s P ?
a ?
e ? ef ? s y P ?
a ?
e ? ef ? s
11
Ý Ý
Ý Ý
n i n
i n i n
i i
i
is 1
js 1
is 1
js 1
It can be seen from the last equation that the change in total CO emissions is a
2
Ž .
function of four variables: The total output P , the share of each branch to the
t
Ž .
Ž .
Ž
j
. total output a , the energy intensity
e and the fuel share
s in each
i t i t
i t
industrial branch. The emission factors are taken as constants because they do not change with time.
Ž .
Applying the total differential formula, Eq. 11 can be decomposed as follows:
m F
j j
Ž .
D C s P y P
? a
? e ?
ef ? s output effect
Ý Ý
n i
i i
is 1
js 1
m F
j j
Ž .
q P ?
a y a
? e ?
ef ? s structural effect
Ý Ý
i n i
i i
is 1
js 1
m F
j j
Ž .
q P ?
a ?
e y e ?
ef ? s energy intensity effect
Ý Ý
i i n
i i
is 1
js 1
m F
j j
j
Ž .
q P ?
a ?
e ? ef ? s y s
fuel mix effect
Ý Ý
i i
i n i
is 1
js 1
Ž . Ž
. q
Residuals R
12 Residuals are then divided into 11 combinatorial product terms of the four
variables where each term represents the joint effect of two variables. For example the term which expresses the joint effect of change in output and change in energy
intensity is the following:
m F
j j
Ž .
Ž .
Ž .
R s P y P ?
a ?
e y e ?
ef ? s 13
Ý Ý
13 n
i i n
i i
is 1
js 1
Ž In the same way the rest of the interaction terms R , R , R , R , R , R
,
12 14
23 24
34 123
. R
, R , R
, R are formed.
124 134
234 1234
Ž Under the ceteris paribus condition all variables remain unchanged except of
. Ž
. one each time each term of Eq. 12 expresses the change in CO emissions
2
attributed on the specific variable given that there is no change in the rest of the variables
3. Application study
