A Cross-Country Assessment of Energy-Related CO2 Emissions: An Extended Kaya Index Decomposition Approach

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1 Fátma Lma, Manuel Lopes Nunes, Jorge Cunha, André F.P. Lucena, A cross-country assessment of energy-related CO2 emssons: An extended Kaya Index Decomposton Approach, Energy, Volume 115, Part 2, 15 November 2016, Pages , ISSN , ( 8) A Cross-Country Assessment of Energy-Related CO2 Emssons: An Extended Kaya Index Decomposton Approach Fátma Lma 1, Manuel Lopes Nunes 2, Jorge Cunha 2* and André F. P. Lucena 3 1 Department of Producton and Systems, Unversty of Mnho, Portugal 2 Algortm Research Centre, Unversty of Mnho, Portugal 3 Energy Plannng Program, Unversdade Federal do Ro de Janero, Brazl * Correspondng author: jscunha@dps.umnho.pt, Unversty of Mnho KEYWORDS Carbon Doxde Emssons, Decomposton Approach, Kaya Identty, Sustanable Development Abstract As the threat of clmate change becomes ncreasngly acknowledged, t becomes more evdent that past and current unsustanable energy consumpton patterns cannot be pursued or mantaned. In order to help polcy makers across the globe to address ths challengng goal, decomposton technques have been appled to dentfy the man drvers of changes n energy consumpton and CO 2 emssons. Ths study presents a cross-country assessment of man energy- related CO 2 emsson drvers for Portugal, Unted Kngdom, Brazl and Chna, resortng to an approach that dfferentates the contrbuton of all fuel alternatves both renewable and non-renewable, ncludng nuclear energy. The results obtaned have shown the relevance of energy ntensty and affluence effects as well as RES contrbuton as man emsson drvers whch means that ther relatonshps consttute areas that requre a more mmedate acton by energy polcy decsonmakers. In terms of polcy mplcatons, t seems clear that Brazl and Portugal need to focus on measures mprovng energy effcency whereas Chna and UK need to prortze ssues regardng the weght of non-renewable energy sources n ther energy mx. Another mportant mplcaton s the need to promote synerges wthn the energy sector, regardng energy securty, clmate change and polluton mtgaton goals. 1. Introducton Energy s role to attan soco-economc development has been already hstorcally recognzed (see [1], [2]). Notwthstandng, as the threat of clmate change becomes ncreasngly acknowledged, past and current unsustanable energy consumpton patterns cannot be mantaned. These patterns present an excessve relance on non-renewable energy sources, wth fossl fuels accountng for 87% of prmary energy supply, from whch 33% of ol s allocated to transport sector, and 30% of coal to electrcty and ndustry sectors, although natural gas (24%) s ncreasng ts share across

2 aforementoned sectors [3]. These statstcs corroborate the perspectve of consderng these three sectors (energy, ndustry and transport) as major contrbutors to global CO 2 emssons [4]. Accordng to the Unted Natons Intergovernmental Panel on Clmate Change [5] latest estmates, greenhouse gas (GHG) emssons have ncreased between 2000 and 2010, due manly to energy supply (47%), ndustry (30%), transport (11%) and buldngs (3%) sectors. Furthermore, as countres mprove ther socoeconomc welfare, ncreasng levels of goods and servces producton often mply ncreasng energy consumpton and CO 2 emssons [3], [6], condtonng future energy sustanablty. Therefore, accountng for energy- related CO 2 emssons becomes mperatve to promote a shft towards sustanable development. Wthn ths context, two methodologes have been ncreasngly used to dentfy the man drvers underlyng changes n energy use and CO 2 emssons. The frst methodology, Kaya Identty [7], has been adopted by several nsttutons, such as the Internatonal Energy Agency [8], to ascertan to what extent dfferent factors mpact CO 2 emsson level and has been recently extended to account for not only the mpact of RES but also of nuclear energy [9]. The second methodology, Index Decomposton Analyss (IDA), although havng been used n the energy sector for several decades, only recently extended ts scope to envronmental aspects [10], [11]. Ths methodology decomposes the changes n the level of CO 2 emssons nto fve man explanatory effects, namely actvty, structure, ntensty, energy mx and emsson factor. Although both these technques have been wdely used at natonal [12] [16] and nternatonal level [13], [17] [19], recently developed extended Kaya Identty decomposton has not been prevously appled n a cross-country comparson for Portugal, Unted Kngdom, Brazl and Chna. Therefore, ths work ams to promote, for ths set of countres, a cross-country assessment of man energy- related CO 2 emsson drvers, resortng to an approach that dfferentates the contrbuton of RES and nuclear energy for overall carbon emssons. Ths set of countres s characterzed by substantally dfferent energy matrx, as well as socoeconomc backgrounds and shared responsbltes towards clmate change. Whle developed countres have an hstorc responsblty regardng carbon emssons, emergng countres have become key players regardng future emssons, surpassng overall emssons of developed countres [20]. Furthermore, the Lsbon Treaty, sgned n Portugal n 2007, has changed the energy polcy landscape n the European Unon (EU), establshng four man common lnes of acton: ensurng energy securty of supply, promoton of energy effcency, energy savng and development of RES [21], requrng coordnaton of energy plannng at natonal level wth transnatonal nterests and/or goals. Moreover, ncreasng relevance and nterconnectvty wth other polcy areas, such as clmate change and envronment has also been recognzed [21], renforcng transversal nature of ths ssue. It s n ths context of transton between a more closed towards a more opened and shared energy plannng process, wllngly recognzng the relevance of energy and ts nterconnectvty to other key goals of sustanablty that ths study takes place. Regardng the chosen countres, Brazl s energy matrx ncludes nuclear and s mostly of a renewable nature, Portugal does not nclude nuclear, but has a hgher share of RES than Unted Kngdom and Chna energy mx, whch ncludes nuclear but has a lower share of RES. It s growngly recognzed that the evoluton of the energy sector and related polces and the ever ncreasng concerns wth sustanable development (where the economc, envronmental and socal dmensons must be taken nto account) have brought about profound changes regardng the energy decson-makng process and the settng of a country s man goals. In ths context, the analyss of the four countres ncluded n ths study, wth prevously mentoned dfferent characterstcs, helps to understand that sustanable energy plannng should now be seen as a multdmensonal process, across dfferent scales of analyss and capable of movng from the local to the global level. 2

3 To gve some perspectve on the countres under analyss, the evoluton of Total Prmary Energy Supply (TPES), energyrelated CO 2 emssons, Gross Domestc Product n Purchasng Power Partes (GDP PPP) and Populaton (POP) growth, for the perod , s presented n Fgure 1. As can be seen, dfferences n the evoluton of those varables are found reflectng dfferent socoeconomc and envronmental contexts. The assessment of those ndcators allows emphaszng common and dvergng trends, regardng energy-economy and envronment dynamcs. Two common trends can be observed for all countres: the convergence between energy and CO 2 emssons as opposed to dvergence between CO 2 emssons and populaton growth. Hence, populaton by tself mght not promote an accurate assessment of energysocoeconomc-emsson nexus. It s also noteworthy that, to dfferent extents, energy and carbon emssons trends both reflect fluctuatons n economc growth, beng concdent wth expanson and recesson epsodes. These convergences are expected trends, gven that energy sector has been consdered one of the most carbon ntensve human actvtes, albet a crucal factor to promote economc development [8]. (a) (b) (c) (d) Fg. 1. Prmary Energy, Populaton, GDP PPP and CO2 Emssons trends 1 (Sources: [22] and [23]) As llustrated n Panel a) of Fgure 1, Portugal s GDP PPP ncreased durng the 1990s, beng followed by economc stagnaton untl After a slght ncrease, ths trend has been dsrupted by economc recesson started n year Energy use and CO 2 emssons trend have ncreased untl 2005, regsterng a decreasng trend onwards. However, CO 2 emssons n 2010 were stll 24% hgher than n Addtonally, populaton growth has not changed sgnfcantly comparatvely to base year (1990), ncreasng slghtly between 1990 and 2010 (6%). For the Unted Kngdom (UK), GDP PPP presents an ncreasng trend, only dsrupted by the economc crses started n 2008, whle both energy use and CO 2 1 All non-energy purposes are excluded from CO 2 statstcs. Therefore Land Use, Land Use Change and Forestry (LULUFC) are not taken nto account n ths approach. 3

4 emssons trends have gradually decreased (Fgure 1, Panel (b)). Ths suggests a detachment between energy use, carbon emssons and GDP. Populaton presents a slght ncreasng trend durng ths perod (beng 9% hgher n 2010 than n 1990). Regardng emergng countres, although Brazl presents an ncreasng trend for all varables (Fgure 1, Panel (c)), t s clear that the growth n CO 2 emssons was hgher than that for energy use and GDP, whch seems to ndcate that there was not a decouplng between economc growth and ts envronmental mpacts. For Chna there was an ncreasng trend for GDP PPP, TEPS and CO 2. However, the economc growth was more accentuated than the ncrease n energy use and CO 2 emssons whch s ndcatve of a decrease n the country s energy and carbon ntenstes. Overall, for the perod , one can conclude that: a) both Chna and Brazl have experenced sgnfcant economc growth, wth ncreases n GDP PPP of 580% and 83% respectvely, contrastng wth UK (56%) and Portugal s (43%) growth; b) both emergng countres present an mportant ncrease n energy use and energy- related CO 2 emssons; c) these emssons seem to follow closely the energy use pattern and economc growth (wth the excepton of UK); and d) populaton has kept a stable trend, wthout marked varatons across the four countres. The use of aggregate ndcators though useful to contextualze the socoeconomc and envronmental background of the analysed countres, mply that dentfed trends and potental nter-lnkages as well as ther relevance s ascertaned through the use of decomposton approach. After ths ntroductory secton, the next secton presents a bref overvew of the lterature on decomposton of energyrelated CO 2 emssons. Secton 3 descrbes the methodology adopted and data sources used. Secton 4 presents the results of the decomposton approach adopted whereas Secton 5 dscusses those results. Fnally, secton 6 draws the man conclusons and presents avenues for future research. 2. Bref Lterature Revew The decomposton approach has been an extensvely used tool for the assessment of the energy-envronment nexus (see [11], [24]), whose emergence has reflected the ncreasng relevance and ntegraton of clmate change ssues n energy plannng (see [25], [26]). Ths relatonshp s patent n pror studes, ether at country or cross-country level, often focusng dfferent energy and carbon ntensve sectors of both developed and emergng countres. For nstance, the key role played by the ndustry sector for energy and energy- related CO 2 emsson growth n Chna has been emphassed by [27], [28]. For both studes, focusng a smlar tme seres, t was found that changes n aggregate carbon emssons have been drven manly by the actvty effect regardng emssons ncrease, n contrast to energy ntensty consdered the man drver for emssons decrease. Addtonally, the contrbuton of carbon ntensty nature of the energy mx for emssons ncrease [28], and the shft towards a cleaner energy mx towards emsson decrease [27] has also been acknowledged. In spte of ths, [12] clam that the mpact of ndustry structure on emsson ncrease has shfted recently, whch has led them to suggest a coordnated decrease of ntensty and structural effects to ensure emsson reducton. Smlarly actvty effect, as well as populaton growth, seem to have drven emssons upwards n Brazl, between 1970 and 2009, beng offset by ncreasng dversfcaton of the energy mx, nstead of energy ntensty effect [29], [30]. In lne wth these studes, s the comparson between the determnants of CO 2 emssons for Brazl and Russa, from 1992 to 2011, developed by [31] that has hnted the need to further focus the neglected ntensty effect at energy plannng and envronmental sustanablty levels. Meanwhle, ncreases n energy use n ndustral and resdental sectors, n Brazl between 1970 and 1996, have 4

5 been attrbuted to changes n affluence and populaton effects, beng opposed by ntensty effect [32]. Decomposton analyss of Unted Kngdom s manufacturng sector, performed by [33], between 1990 and 2007, has emphassed the ntensty effect as the man drver for emssons amongst changes n output, ndustral structure, fuel mx and electrcty emsson factor contrbutons. In the case of Portugal, decomposton of 36 economc sectors, between 1996 and 2009, has been undertaken by [16], evdencng the key role played by ntensty effect. Furthermore, changes n carbon doxde emssons at European Unon (EU) level for the power sector, between 2001 and 2010 have been assessed by [34], havng hghlghted the contrbuton of ntensty effect, though wth opposng drectons at country level,.e. favourng emsson reductons for Portugal and emsson ncrease for Unted Kngdom. More recently, [35] assessment of emsson drvers for electrcty generaton n EU-28 placed partcular emphass on the economc crss, havng shown that despte economc recesson and takng nto consderaton Kyoto Protocol targets, ntensty effect was the man drver for emsson reducton offsettng ncreases prompted by actvty effect. Addtonally, crucal role played by ntensty effect has also been focused n studes featurng both developed and emergng countres. For example, Kavo-oja et. al. [18] have reported the exstence of convergence regardng ntensty effect towards CO 2 emsson reducton n contrast to dvergences of structural effect, between three major world economes (Chna, EU-27 and Unted States of Amerca (USA)). 3. Data and Decomposton Approach Ths study follows the approach proposed by [9]. As llustrated n Fgure 2, t results from the combnaton of two major research streams: Kaya [7] and Logarthmc Mean Dvsa Index (LMDI) approach [36]. These frameworks have contrbuted to expose nter-lnkages between CO 2 emssons and anthropogenc nterventon Fg. 2. Methodologcal Framework Desgn The concept behnd IPAT equaton (1) has been developed by [37] and [38]. It correlates envronmental mpacts, I, wth three factors n a smplfed manner (populaton, P, affluence, A, and technology, T), becomng ncreasngly popular [20], [39]. If perceved wthn a sustanablty framework, t can establsh nter-lnkages between envronmental and socoeconomc dmensons [9] as ndcators to measure envronmental mpacts of human actvty [9], [20], [40], [41], as summarzed n the followng equaton: Impact (I) = Populaton (P) Affluence (A) Technology (T) (1) As a dervaton of IPAT equaton, Kaya dentty [7] extends ths prncple to GHG emssons, promotng the assessment of drvers of energy- related CO 2 emssons [40], [42], accordng to: CO 2 Emssons = Populaton (GDP Pop) (Energy GDP) (CO 2 Energy) (2) Populaton Affluence Technology 5

6 Besdes populaton and affluence, ths approach takes nto consderaton addtonal nfluencng factors regardng overall emssons, such as energy ntensty of economy (energy/gdp) and carbon ntensty of energy (CO 2/energy). Despte ths, Kaya dentty mantans IPAT s straghtforward structure, featurng three orgnal mpact determnants, as llustrated n equaton (2). In recent years, Kaya dentty has been extended (e.g. [41], [42]) n order to account not only for the contrbuton of fossl fuel (FF), but also for renewable energy sources (RES), as emphassed n Fgure 2. Notwthstandng, equaton (2) does not dfferentate between the contrbuton of RES and other carbon-free alternatves (e.g. nuclear energy (N)), whch has led [9] to develop an extended Kaya equaton to address the prevously mentoned gap (see Fgure 2). The frst step n ths novel approach s to establsh an dentty functon, whch n ths case corresponds to an adaptaton of the orgnal Kaya dentty equaton. As so, extended verson encompasses the followng effects: C tot = C = [(C /FF ) (FF /FF) (FF/FFN) (FFN/E) (E/Y) (Y/P) P ] = F 1 S 1 S 2 S 3 IGP (3) Where, C tot = CO 2 emssons C = CO 2 emssons from fossl fuel type F 1 = C /FF, CO 2 emsson factor, for fossl fuel type S 1 = FF /FF, share of fossl fuel n total fossl fuel S 2 = FF/FFN, shares of fossl fuel n total fossl fuels plus nuclear S 3 = FFN/E, share of fossl fuels plus nuclear n total energy I= E/Y, aggregate energy ntensty G= Y/P, GDP per capta or affluence P= Populaton Ths redefned dentty functon s then subject to a decomposton approach. As llustrated n Fgure 2, ths study has adopted an Index Decomposton Approach (IDA), whch s wdely used to analyse the contrbuton of each factor to shfts n aggregate carbon emssons, and promotng cross-country comparsons [11]. Wthn IDA, Logarthmc Mean Dvsa Index (LMDI) has been favoured to other decomposton methods n vrtue of ts advantages [36], that range from perfect decomposton (no resdual terms); ablty to cope wth zero values (replacement by small postve value, between and ); smplfed nter-lnkages between addtve and multplcatve verson and consstency n aggregaton. Inexstence of negatve changes, easness of applcaton and nterpretaton have also been emphassed by [36] and [42] as desrable propertes of multplcatve form. Furthermore, due to ease of formulaton LMDI I has been the most recommended methodology by [10] and [36]. Therefore, gven abovementoned propertes, ths study follows the multplcatve LMDI I decomposton approach to explan changes n CO 2 emssons and can be represented as llustrated bellow (Table 2 descrbes each one of the emssons drvers): C tot = C t C 0 = C emf C ffse C nec C rec C nt C ypc C pop In ths equaton C emf stands for emsson factor effect, and together wth C nt, energy ntensty effect, they consttute ntensty effect; C ffse represents fossl fuel substtuton, contrbutes along wth Crec and Cnec to structural effect; C ypc and C pop consttute scale effects. (4) 6

7 Table 2 Summary of man drvers contemplated n decomposton approach (adapted from [9]) Varable Drvers/Effects Typology Sgnfcance Ctot CO2 emssons Aggregate Total change n CO2 emssons from energy use Cemf Emsson Coeffcent Factor Intensty Changes n carbon content per unt of fossl fuel (coal, ol, gas) Cnt Energy Intensty Intensty Changes n energy/gdp or energy ntensty Cffse Fossl Fuel Substtuton Structure Substtuton or fuel swtchng (coal, ol, gas) n total fossl fuels Cnec Nuclear Energy Structure Nuclear energy contrbuton by dsplacement of fossl Crec Contrbuton Renewable Energy Contrbuton Structure fuels Renewable energy contrbuton by dsplacement of fossl fuels (hydro; wnd; solar; bomass ) Cypc Affluence Scale Changes n GDP/capta or affluence Cpop Populaton Scale Changes n total populaton In accordance to LMDI I method (consdered by [43] a smpler LMDI formulae), each one of these components can be calculated as: Cemf = exp [ w ln ( F 1 t 0 F ) ] = exp [ (C t C 0 )/(lnc t lnc 0 ) 1 (C t C 0 )/(lnc t lnc 0 ) ln (F 1 t /F 0 1 )] (5) Cffse = exp [ w ln ( S 1 t 0 S ) ] = exp [ (C t C 0 )/(lnc t lnc 0 ) 1 (C t C 0 )/(lnc t lnc 0 ) ln (S 1 t /S 0 1 )] Cnec = exp [ w ln ( S 2 t 0 S ) ] = exp [ (C t C 0 )/(lnc t lnc 0 ) 2 (C t C 0 )/(lnc t lnc 0 ) ln (S 2 t /S 0 2 )] (7) Crec = exp [ w ln ( S 3 t 0 S ) ] = exp [ (C t C 0 )/(lnc t lnc 0 ) 3 (C t C 0 )/(lnc t lnc 0 ) ln (S 3 t /S 0 3 )] Cnt = exp [ w ln ( It I 0) ] = exp [ (C t C 0 )/(lnc t lnc 0 ) (C t C 0 )/(lnc t lnc 0 ln (It ) I 0) ] Cypc = exp [ w ln ( Gt G 0) ] = exp [ (C t C 0 )/(lnc t lnc 0 ) (C t C 0 )/(lnc t lnc 0 ln (Gt ) G 0) ] Cpop = exp [ w ln ( Pt P 0) ] = exp [ (C t C 0 )/(lnc t lnc 0 ) (C t C 0 )/(lnc t lnc 0 ln (Pt ) P 0) ] Where w represents the weght functon, each one of these equatons represents a factor that contrbutes to a change n total CO 2 emssons, durng a stpulated tmeframe t (wth t = 1990,, 2010 n ths study). Regardng the decomposton approach undertaken, gven that ths study s database covers a large dataset, from multple countres n a consstent manner and over a consderable perod of tme, an annual channg perspectve was adopted, smlarly to [41], [44]. Furthermore, lack of accessblty to a more detaled emsson database has rendered mpossble the ntal ntenton of assessng emssons at sectoral level. Notwthstandng, the use of prmary energy has ts advantages, allowng to portray mprovements from the supply sde that would otherwse pass unnotced from a fnal consumpton perspectve [3]. For emprcal analyss, a database was bult from a combnaton of two man data sources: the Internatonal Energy Agency (IEA), for prmary energy and energy- related CO 2 emssons; and the World Development Indcators seres (World Bank), for populaton and GDP. Furthermore, by usng GDP expressed n Purchasng Power Partes (PPP) at constant prces for 2005, ths study avods dstortons n energy ntensty values by dsregardng dfferences amongst countres prces [3], [45]. Both prmary energy and CO 2 emssons data contemplate (6) (8) (9) (10) (11) 7

8 fossl fuel contrbutons (coal, ol and natural gas) and has been assembled n nternatonally standardzed World Bank database. Although a detaled level of nformaton has been consdered crucal to provde a comprehensve polcy assessment, ntensty effect has often been measured at aggregate level gven lmted avalablty and qualty of dsaggregate databases (see [3], [46]). However, efforts have been developed by several nternatonal organzatons and projects (e.g. IEA and ODYSSEE-MURE Project) to overcome ths shortcomng and mprove data gaps at sectoral and sub-sectoral levels ([3]). Another drawback assocated wth the decomposton approach s ncreasng complexty of result nterpretaton and analyss brought by nterconnectvty and nterdependency amongst effects (see [47], [48]). Ths affnty s expected to ncrease wth the number of varables consdered n decomposton equaton [48], but could be surpassed resortng to an econometrc approach to determne what knd of causalty s assocated wth these complementary effects [47]. Addtonally, the need to take nto account dfferng socoeconomc and envronmental contexts, stll makes cross-country assessment a challenge [49], even though the current work s reflectve of data and decomposton choces that look to mprove methodologcal ssues and promote effectve cross-country comparsons, as suggested by [50], [51]. 4. Decomposton results Results from annual channg decomposton, between 1990 and 2010, are summarzed n ths secton (Tables wth detaled values for all energy- related CO 2 emssons drvers for all countres are presented n Appendx A). Followng [45], a classfcaton crtera was adopted, n order to facltate the nterpretaton of results regardng the mpact of the dfferent CO 2 emssons drvers. It conssts of a three level crtera where a value of 1.00 means no change n emssons; a value below 1.00 means that a partcular drver has contrbuted to a reducton n emssons, whereas a value above 1.00 mples an ncrease n emssons. Fgure 3 shows the cumulatve change n CO 2 emssons (Ctot) as well as n the respectve drvng forces for Portugal snce 1990 untl As expected, Ctot s above 1 almost for all years untl 2005 and below 1.00 afterwards. Energy ntensty (Cnt), affluence (Cypc) and contrbuton of renewables (Crec) seem to play a key role regardng carbon emssons n Portugal Fg. 3. Cumulatve decomposton of CO2 emssons n Portugal (Source: authors elaboraton from data on [22] and [23]). 8

9 Hgher ncreases n carbon emssons occurred durng the 1990s and the man drvers were energy ntensty (Cnt), and affluence (Cypc) effects, mplyng a shft towards more energy and carbon ntensve economc actvty structure and energy mx, along wth a greater GDP per capta. Durng ths perod, these factors were opposed by fossl fuel substtuton effect (Cffse), mplyng that prmary energy mx underwent a shft towards less carbon ntensve alternatves. Ths factor has contrbuted to slowdown rsng emsson levels for ths perod. The reducton n carbon emssons n 2000 s decade (especally from 2005 onwards) s explaned manly by the effect of energy ntensty (Cnt), fossl fuel substtuton (Cffse) and contrbuton of renewables (Crec) that have outweghed the mpact of the affluence effect (Cypc). As expected, populaton growth (Cpop) has not been an nfluencng factor for CO 2 emsson growth durng the entre perod of analyss. Snce UK s CO 2 emssons presented a decreasng trend for the perod analysed, Ctot s almost always below 1.00 as llustrated n Fgure 4. From ths Fgure, t s clear that energy ntensty (Cnt) was the man drver of declne on total CO 2 emssons. Also, fossl fuel substtuton effect (Cffse) has had a postve mpact for the declne on carbon emssons. On the contrary, contrbutng for the ncrease n aggregate CO 2 emssons was the affluence effect (Cypc) snce ts value s almost always clearly above However, t seems that the magntude of the mpact of energy ntensty and fossl fuel substtuton surpassed that of the affluence effect therefore contrbutng to acheve decouplng between emssons and economc growth. The other four drvers (Cemf, Cnepe, Crepe, and Cpop) have had a margnal mpact ether on ncreasng or decreasng energy- related CO 2 emssons Fg. 4. Cumulatve decomposton of CO2 emssons n UK (Source: authors elaboraton from data on [22] and [23]). As Brazl has shown an ncreasng trend for energy- related CO 2 emssons, the Ctot varable n Fgure 5 s always above 1.00 (wth only three years as excepton). The man drvers of that ncrease n carbon emssons were energy ntensty (Cnt), the affluence effect (Cypc), and populaton growth (Cpop) for the entre perod of tme. For the 1990 s decade the nfluence of renewables (Crec) has also contrbuted for an ncrease n CO 2 emssons, wth a reversal of ths mpact n 2000 s decade. The emsson factor effect (Cemf) and contrbuton of nuclear effect (Cnec) have had no mpact on carbon emssons, snce ther value were almost always equal to Therefore, t seems that the Brazlan economc and populaton growth have drven to steep ncreases of energy use and carbon emssons that were not offset by an mproved energy effcency of the country (reflected n the Cnt varable). 9

10 Fg. 5. Cumulatve decomposton of CO2 emssons n Brazl (Source: authors elaboraton from data on [22] and [23]). Smlarly to Brazl, Chna has wtnessed an mportant ncrease on energy- related CO 2 emssons, partcularly from 2001 onwards, and ths trend s reflected n Fgure 6 by the fact varable Ctot beng always above From Fgure 6, t s possble to see that the man factor contrbutng for the ncrease on carbon emssons was the affluence effect (Cypc), derved from the mportant economc growth of Chna n ths perod. The role of renewables (Crepe) and, to a less extent, of populaton growth (Cpop) have also contrbuted to an ncrease n carbon emssons. Counterbalancng ths ncrease was, manly, an ncrease of energy effcency on Chna s economy, snce varable Cnt s almost always below Addtonally, the emsson coeffcent factor (Cemf) has had some mpact on reducng energy- related CO 2 emssons. From the analyss of Fgure 6, s also possble to dentfy three perods that show mportant annual changes n CO 2 emssons. The frst corresponds to where the affluence effect clearly offset the energy ntensty effect leadng to a sgnfcant ncrease n carbon emssons. The second corresponds to perod where an mportant decrease n overall carbon emssons was verfed. Ths decrease has resulted from a combnaton of both energy ntensty (Cnt) and emsson factor (Cemf) effects (.e. effcency rse and lower carbon content) whch have been enough to offset the affluence effect. Fnally, the perod wtnessed a sgnfcant annual ncrease n aggregate CO 2 emssons, where most of the effects featured n ths decomposton approach (wth the excepton of fossl fuel substtuton (Cffse) and contrbuton of nuclear effect (Cnec)) have contrbuted to that ncrease

11 Fg. 6. Cumulatve decomposton of CO2 emssons n Chna (Source: authors elaboraton from data on [22] and [23]). Summarzng, decomposton results have emphassed the relevance of energy ntensty (Cnt), affluence (Cypc) and, to a less extent, renewable energy contrbuton (Crec) effects. Ther combnaton has contrbuted to ncrease carbon emssons (Ctot) n developed and emergng countres. Though affluence effect (Cypc) has been consdered the man drver for carbon emsson peaks, other common factors have contrbuted to ncrease overall emssons, namely ncreasng energy ntensty and decreasng contrbuton of renewables effect (wth the excepton of UK). Smlarly, though reductons n energy ntensty (Cnt) have consstently contrbuted to reach most accentuated decreases, decomposton results have also hghlghted contrbuton of other factors such as reductons n affluence (wth the excepton of Chna) and ncreasng contrbuton of renewable energy, whereas remanng effects have played a less sgnfcant role comparatvely to man dvers (Cnt and Cypc). Despte prevalence of years wth total effect (Ctot) above 1.00 between 1990 and 2010 (Fgures 3-6), decomposton results have also evdenced epsodes of decouplng between economc growth and energy- related carbon emssons (Ctot) for most countres (wth the excepton of Portugal). These epsodes have also been drven by a common effect to all countres, energy ntensty (Cnt) reductons, whch, combned wth other drvers exposed by extended Kaya, have contrbuted to offset affluence effect. Therefore, gven heterogenety of the results obtaned, a more n-depth evaluaton of these effects and ther nterconnectons s provded n the next secton. 5. Dscusson of results Followng the classfcaton of energy- related CO 2 emssons change drvers presented n Table 2, the cumulatve decomposton results are analysed from the perspectve of each type of effect n ths secton. 5.1 Scale Effect (Cypc and Cpop) Perspectve Decomposton results have hghlghted adverse contrbuton of scale effects towards ncreasng CO 2 emsson (Ctot) trend four all countres analysed, as llustrated n Fgure 7. 11

12 Fg. 7. Scale Effects for CO2 Emssons Decomposton (Source: authors elaboraton from data on [22] and [23]) Though both these effects have derved from decomposton of economc output (GDP PPP) [52], changes n affluence effect (GDP PPP/POP) seem to be more sgnfcant than changes n populaton growth (POP). Shfts n populaton growth rate were not sgnfcant wthn the tmeframe consdered, mantanng populaton effect practcally unaltered, yet always above or equal to Ths means that, even wthout sgnfcant changes, populaton effect was ether postve (above 1.00) or neutral (equal to 1.00), never actvely contrbutng to decrease (below 1.00) overall emssons for the set of countres. In spte of ths, n emergng countres, where populaton growth was more sgnfcant, populaton effect and growth rates evdenced a slght decrease n more recent years. These results are n keepng wth [29] fndngs for Brazl where postve contrbuton of ths effect has been recognzed n spte of mnor fluctuatons n recent years; and wth [42] where declnng populaton trend n Chna has been attrbuted to a strct famly plannng polcy n vgour snce 1970s. Agng populaton has been dentfed as a shapng factor for developed countres [53], contextualzng the evoluton of Cpop effect and macroeconomc ndcators for Portugal. In recent years, populaton growth rates have been reflectve of low brth rates and negatve net mgraton values, assocated wth economc crss [54]. However, slght ncrease n both populaton effect and growth rates for UK n the last half of 2000 s decade, has also been ndcatve of postve contrbuton of mgraton flux. Internatonal mgraton has been consdered a focal aspect when consderng demographc growth [18], especally n Europe where mmgraton n search of labour and mproved qualty of lfe has been recurrent [55]. Therefore, based on the results obtaned, human-emsson nteractons should be ncreasngly focused rather than populaton growth by tself. Ths key observaton s algned wth [20] percepton that populaton effect s bound to be replaced as a determnant for CO 2 emssons, n vrtue of ts decreasng nfluence. Aspects such as mass urbanzaton, trade and consumpton seem to be emergng as drvng forces for carbon emssons. Furthermore, new approaches to emsson assessment have emphassed the need to consder addtonal aspects, such as consumpton patterns and technology when consderng Cpop [40]. Gven ths, varatons n populaton effect (Cpop) have had a less sgnfcant mpact on emssons comparatvely to affluence effect (Cypc), consdered as the man drver for overall carbon emssons between 1990 and Increasng relevance of affluence n detrment of populaton effect has also been observed n prevous studes [9], [18], [20], [42], [55], [56]. Takng nto account affluence defnton - and the secondary role played by populaton effect - ts domnance seems to be mostly assocated wth shfts n economc growth, ndrectly llustratng the relevance of ths macroeconomc ndcator for overall emssons. Ths nfluence s patent for all countres analysed. However, most sgnfcant mpacts 12

13 were verfed n emergng countres, whch s consstent wth ncreasng relevance of these countres n global economy and therefore as large emtters. Both [57] and [58] have hghlghted Chna s top poston, surpassng other countres (developed or emergng) n terms of populaton, energy producton and consumpton and GHG emssons. Assocated wth ncreasng affluence emergng countres have also seen a shft n consumpton patterns, convergng towards developed country standards [40], whch mght ental consderable ncreases n terms of carbon emssons. Addtonally, consumpton preferences for servces and hgh value-added products n developed countres have also contrbuted for relocaton of heavy ndustres to emergng countres [17], ncreasng emsson dfferental between both set of countres. Thus, although consderable potental for emsson reducton has been recognzed n populaton and affluence effects [52], [56], most polces for emsson reducton focus energy and carbon ntensty snce economc growth has been consdered an mperatve for both developed [9] and emergng countres [6]. Nonetheless, t has been ncreasngly recognzed that n order to promote long-term clmate change mtgaton, regardless of developmental stage, t s mperatve to rase awareness towards a more sustanable lfestyle [20]. 5.2 Intensty Effect (Cnt and Cemf) Perspectve Regardng ths perspectve, decomposton results have hghlghted that, n general, emsson factor effect (Cemf) played a less sgnfcant role than energy ntensty (Cnt) effect on reducng energy- related CO 2 emssons, as llustrated n Fgure Fg. 8. Intensty Effects for CO2 Emssons Decomposton (Source: authors elaboraton from data on [22] and [23]) In spte of key role played by energy ntensty effect (Cnt) towards decreasng overall emssons (Ctot), most accentuated decrease was reached wth the contrbuton of both ntensty effects, though n dfferent degrees. Carbon emsson factor (Cemf) measures changes n carbon content per unt of fossl fuel, beng assocated wth techncal aspects such as fuel qualty and potentally, abatement technologes [9]. Carbon content of dfferent energy alternatves nfluence carbon emssons, wth coal beng consdered the most carbon ntensve fossl fuel, followed by ol and natural gas, contrastng wth emsson free alternatves - wnd, solar and nuclear power [52]. The ncreasngly renewable nature of the energy mx, hence lower carbon content, has contrbuted to ether attenuate emsson ncrease durng peak emsson or motvate emsson decrease durng most accentuated decrease. Ths nter-lnkage between renewable energy mx and carbon 13

14 emsson factor effects s partcularly evdent wthn emergng countres. Although both emergng countres have seen an ncrease n energy use and emssons assocated wth economc growth, emsson factor effect had a postve contrbuton (Cemf below 1.00) towards emsson decrease n Chna and practcally no mpact on Brazl s aggregate emssons (Cemf almost always equal to 1.00). These results are reflectve of carbon content of each country s energy mx. Whereas Brazl s energy supply from hydropower and sugarcane products has seen a remarkable ncrease [29], Chna s energy supply despte recent efforts to dversfy ts energy mx, s mostly dependent on fossl fuels, namely coal and ol as emphassed by [42] and [18]. However, natural gas has been progressvely ncreasng ts share, promotng coal s replacement [59], thus makng a sgnfcant contrbuton to decrease carbon ntensty of the energy mx. Meanwhle, although Portugal and UK have seen n recent years a postve transformaton of ther energy mx, Cemf behavour durng peak emssons mght also be ndcatve of the energy system s dependence on fossl fuel alternatves, especally durng economc growth perods. Such results renforce [20] percepton that, n order to ensure emsson reducton durng perods of economc expanson, mprovements of ntensty effect should also focus energy mx shfts towards renewables, reducng ts carbon content. Moreover, ths transton towards less carbon ntensve alternatves could also be encouraged by technologcal mprovements [17] comprsed wthn the energy ntensty effect (Cnt). Ths effect has dverged consderably between and amongst advanced and emergng economes. Chna has seen sgnfcant reductons n economy s energy ntensty contrastng wth Brazl. These results are n keepng wth [13] fndngs for Brazl where despte structural shft towards less energy ntensve ndustres, a loss of effcency combned wth fast economc growth has led to an ncrease n overall emssons. Assocated wth upsurges n energy ntensty, [29] has dentfed technologcal nnovaton, producton chan management and energy savngs as polcy measures requrng further mprovements n Brazl. Conversely, decreasng energy ntensty has consstently opposed affluence effect n Chna, contrbutng to curb carbon emssons. Smultaneous decrease of emsson factor (Cemf) and energy ntensty (Cnt) effects durng most sgnfcant reducton s n keepng wth [27] fndngs emphaszng that shuttng down of hgh carbon content and low effcency companes, have contrbuted to ncrease effcency and decrease carbon content of the energy mx promotng a decouplng effect. Effcency gans n Chna have been reached through polcy efforts to reduce emssons and energy consumpton, establshng energy ntensty targets (see [60]). Stll, hgh energy consumpton and GDP growth rates denote ndustralzaton and urbanzaton needs of an emergng economy. Therefore, the relevance of ths effect for emsson reducton, especally for emergng countres undergong such a crtcal transton, should be renforced [18]. Whle Brazl should prortze effcency mprovements, amng to mnmze energy waste and carbon emssons, Chna should further mprove energy and carbon ntensty by shftng towards cleaner energy sources [14]. Technologcal mprovements could play an mportant role n ths process through the use of carbon capture and storage (CCS), favourng the use of natural gas nstead of coal [42]. The use of CCS n the future would contrbute to conclate the use of coal n an ncreasngly emsson restrctve envronment [52]. In what concerns Portugal and UK, t s clear that energy ntensty effect has played a more sgnfcant role n decreasng UK s CO 2 emssons than for Portugal. For some years, Portugal has seen dssocaton between ncreasng affluence and decrease of carbon emssons. Ths shft between economc and emsson growth s consstent wth [54] assessment of the country s envronmental and soco-economc context. In the last few years, emsson trend has been largely defned by ndustry relocaton and economc recesson. However, [54] has emphassed that recent mprovements have resulted from a combnaton of the followng factors: a shft towards less carbon ntensve alternatves, technologcal upgradng of energy sector through cogeneraton unts and combned heat and power plants, and effcency mprovements n producton 14

15 processes and fuel qualty. Therefore, these mprovements n carbon emsson factor (Cemf) and energy ntensty (Cnt) led to an overall decrease n emssons n recent years. Moreover, ths result s also reflectve of polcy efforts focusng energy producton and consumpton (see targets set by [61]). In the case of UK, ntensty effect has contrbuted for a decrease n aggregate CO 2 emssons due to heavy ndustry relocaton, sectoral effcency mprovements and transton towards less energy ntensve sectors. Ths trend has also been mentoned by [20] and [18] as a dfferentatng aspect between developed and developng countres. However, [62] foresees n the long-term a convergence of energy ntensty trend for both set of countres. These two aspects have not condtoned strong decouplng effect between ndustral growth and envronmental mpacts durng [49]. Durng ths tme frame [63] have hghlghted the mplementaton of new technologes and facltes and a shft towards more effcent alternatves has contrbuted for emsson reducton, n spte of ncreasng GDP. Gven ths, current progress has resulted from a seres of mult-sectoral measures to mprove energy effcency (e.g. [64]). Notwthstandng, n both developed and emergng economes besdes ntensty effect, emsson reducton has also often mpled shfts n energy mx consttuton ncluded n structural effects, evdencng nterconnectvty amongst effects. Thus, development of polces promotng energy ntensty mprovements wll have repercussons n the energy mx of a country, ether promotng ncorporaton of RES or fossl fuel substtuton ether way, reducng ts carbon content, ultmately promotng a shft towards less energy and carbon ntensve sectors of economy [16]. 5.3 Structural Effect (Crec, Cnec and Cffse) Perspectve Wthn structural effect, decomposton results have emphassed that fuel swtchng (Cffse) has had a less sgnfcant effect for both sets of countres, nuclear energy contrbuton (Cnec) effect has had a punctual role n reducng emssons n Brazl and UK and fnally renewable energy contrbuton (Crec) has had a more sgnfcant role n Portugal and Brazl, although ts relevance and ncreasng ncorporaton has been recognzed n UK and Chna, as portrayed n Fgure Fg. 9. Structure Effects for CO2 Emssons Decomposton (Source: authors elaboraton from data on [22] and [23]) Crec and Cnec effects feature an ncreasng ncorporaton of renewable and nuclear energy alternatves n the energy mx. Therefore mplyng fossl fuels dsplacement and mplctly alterng ts carbon content. Gven nterconnecton wth the emsson factor effect (Cemf) man dvergences regardng energy mx dversfcaton are expected amongst emergng 15

16 countres. In fact, renewable energy contrbuton (Crec) has played mostly opposng roles n Brazl and Chna. These results are once more reflectve of the nature of each country s energy mx (mostly renewable for Brazl and nonrenewable for Chna). Exceptonal nature of the energy system n Brazl has contrbuted to a low emttng power sector contrastng wth Chna s hgh emttng power sector [65]. In spte of ths, Brazl has faced recently a serous energy crss, resultng from a combnaton of the country s dependency on hydropower generaton (over 80%) and extended lack of ranfall [66]. The need to dversfy Brazlan energy matrx became an opportunty to ntensfy the shft towards other renewable energy sources focusng on deployment of small hydropower, bomass and wnd power [30], [66]. Ths epsode and subsequent polcy effort to mantan renewable nature of the energy matrx has been captured by decomposton approach. Notwthstandng, t has also reflected susceptblty of renewable energy alternatves to clmatc varatons. These results are n keepng wth [9] and [67] that has extended ths assessment by focusng nterconnecton to clmate change. In ths context, Brazl has recently establshed GHG emsson targets consstng of absolute reductons [68]. Interestngly, Cnec effect has had a punctual contrbuton n emssons reducton durng the 2001 blackout epsode, possbly beneftng from Angra 2 nuclear facltes becomng commercally operatonal durng ths year [69]; whle Cffse effect has kept unaltered gven that natural gas has been mostly used as backup thermal power generaton for electrcty generaton [65]. Gven the accelerated rate of economc growth and nature of the Chnese energy mx, [12] have emphassed that substantal reducton n carbon emssons s a challenge n the short-term. Current struggle for emsson reducton s patent n the results obtaned, snce components of structural effect that could contrbute for emsson reducton are consstently unaltered (Cffse and Cnec) or contrbutng to ncrease emssons (Crec). Nevertheless, [42] have consdered fuel swtchng from coal to natural gas and fossl fuel substtuton by nuclear and RES vable and desrable optons to reduce carbon emssons n Chna. Furthermore, prvleged use of coal n Chna has also been ted to other polcy goals such as energy securty [18]. It has been found that the shft towards renewables would contrbute to smultaneously reduce carbon emssons whle mprovng energy securty [57], promotng convergence of polces wthn the energy sector. In order to reduce coal dependency, the 12 th Fve Year Plan establshed, for the perod , a substantal ncrease of renewable energy technologes [60]. Despte ths clear commtment, several authors [12], [27] have emphassed the need to artculate polcy measures n order to conclate economc growth and envronmental concerns to attan energy sustanablty. From the decomposton results obtaned, t seems that only a convergng approach featurng structural and ntensty effects can contrbute to reduce emssons wthout hnderng economc development. Smlarly to emergng countres, fossl fuel substtuton (Cffse) and nuclear energy contrbuton (Cnec) effects have had a less sgnfcant or null role n emsson reducton n developed countres. Nonetheless, Cffse contrbuton to emsson reducton has been notced n Portugal durng the late 1990s, due to natural gas ntroducton n natonal energy matrx, crca 1997 [54]. [33] clam UK experenced a smlar phenomenon durng the 1990s, wth ncreasng use of natural gas for electrcty generaton, known as dash for gas epsode. Whle null contrbuton from nuclear energy has been expected for Portugal gven ts absence from the energy matrx, n UK ths effect has contrbuted punctually to attenuate ncrease of overall emssons. Currently, nuclear share for electrcty generaton s only slghtly hgher (20%) than contrbuton of total renewable energy share (19%) [70], wth future plans for expanson for both alternatves. However, at nternatonal level, recent evoluton of ths low carbon alternatve has been stalled by uncertanty brought on by Fukushma ncdent n Japan [71]. Therefore, takng nto account the decomposton results obtaned, further debate regardng the future of nuclear energy should be undertaken. 16

17 Conversely, ncreasng RES contrbuton (Crec) has been evdenced durng ths perod, however wth dfferent mpacts for Portugal and UK. For Portugal, relevance of carbon free alternatves has ncreased consderably between 2004 and 2009, especally regardng nstalled capacty of wnd power projects [72]. Dsplacement of fossl fuels by renewable energy and subsequent contrbuton to mtgate CO 2 emssons durng ths perod has been observed n the results obtaned. In spte of ths, t has been found that ntermttency assocated wth ncreasng RES deployment can contrbute to amplfy emssons nstead of mtgatng them. Smlarly to Brazl, n dryer years, hydropower generaton decreases ts contrbuton for electrcty generaton, contrbutng to ncrease carbon emssons. An addtonal ssue relates to the relevance of renewable energy alternatves to ensure natonal energy securty (by reducng foregn energy dependency) and to mprove the balance of payments account (gven the burden fossl fuel mports stll have n the Portuguese economy). Portugal has seen n recent years ncreasng dversfcaton towards a cleaner energy matrx, promotng greater ncorporaton of wnd power, solar and bomass for electrcty generaton. Accordng to [9], ths approach would contrbute, to a certan extent, to enhance Crec effect by reducng the share of hydropower generaton. Thus, ths result exposes smultaneously man advantages and dsadvantages from RES deployment. If, on the one hand, a greater CO 2 emsson reducton s promoted, on the other hand, uncertanty of energy supply s ncreased. Although UK has seen ts share of renewables for electrcty generaton trplcate between 2000 and 2012, fossl fuels stll account for the bulk of the country s energy consumpton (from whch 37% ol and 33% natural gas) [70]. Mnor contrbuton of Crec effect reflects to a large extent the energy mx consttuton. Therefore, as observed n the decomposton results obtaned, carbon emsson reducton has resulted manly from energy effcency mprovements. Albet, contrbuton from structural effects has been crucal for emsson reducton n recent years, havng resulted from polcy efforts to mprove energy securty and decarbonze economy [70]. Smlarly to Portugal, UK has adopted absolute pledges that have a legally bndng nature (see [71], [73]). Decomposton results and polcy efforts are also ndcatve that further mprovements n overall emssons requre complementary measures featurng structural and ntensty effects. To sum up, dversfcaton of the energy mx towards a cleaner (low carbon content) alternatve has been consdered crucal to attenuate overall carbon emssons regardless of developmental stage. Nevertheless, as prevously emphassed, n order to promote a greater emsson reducton that enables target fulflment, measures featurng affluence, structural and ntensty effects need to be algned. 6. Conclusons As the threat of clmate change becomes ncreasngly acknowledged, t becomes more evdent that past and current unsustanable energy consumpton patterns cannot be pursued or mantaned. However, G20 economes have recently agreed to address together clmate change ssues whle pursung economc growth [20]. Wthn ths context, n order to promote polcy acton towards energy sustanablty, ths study has developed an extended decomposton approach. Ths method has enabled to dentfy key drvers for CO 2 emssons, accountng for the contrbuton of all fuel alternatves both renewable and non-renewable, ncludng nuclear energy. Based on ths approach, a cross-country comparson was developed hghlghtng man common and dvergng drvers assocated wth emsson trends. The results obtaned put n evdence that energy ntensty and affluence effects have been the major drvers of changes n energy- related CO 2 emssons for all countres analysed, even though yearly trends dverge consderably amongst countres. Overall carbon emssons tend to follow closely energy ntensty effect, beng more clearly opposed by affluence effect n UK and Chna comparatvely to Portugal and Brazl. Although there have been epsodes, at a country 17