ENERGY-RELATED GREENHOUSE-GAS EMISSIONS IN THE ASEAN: A DECOMPOSITION ANALYSIS

Transcription

1 ENERGYRELATED GREENHOUSEGAS EMISSIONS IN THE ASEAN: A DECOMPOSITION ANALYSIS Suwn Sandu, Deepak Sharma and Ronnakorn Vayavuth Centre for Energy Polcy Unversty of Technology, Sydney Tel: Emal: Suwn.Sandu@uts.edu.au Abstract The Assocaton of Southeast Asan Natons s one of the most dynamc and dverse regons n the world. Although the regon currently accounts for.% of global greenhousegas emssons, ths share s expected to ncrease substantally due to populaton growth and ncreasng urbansaton and ndustralsaton. Ths s lkely to have mplcatons for the development of regonal clmate polces. Understandng how greenhousegas emssons for countres n the regon has evolved n the past s an mportant rst step to develop meanngful polces. Ths paper analyses the hstorcal development n CO emssons for the ASEAN countres over the perod 97 to 009, usng an ndex decomposton method. The key results show that: () populaton growth and ncreased levels of affluence are the largest contrbutors to emssons growth n most countres; () fossl fuels have ncreasngly become the domnant fuel source n the regon despte recent global envronmental pressures reversng ths trend wll be a challengng task; () producton structures for most countres have ncreasngly become concentrated towards energyntensve ndustral sector; () the regon has acheved energy efcency gans at both enduse and converson levels n fact ths s the only factor that led to reduced emssons; and () the effect of changes n carbon ntensty of prmary energy was only neglgble and no meanngful trend can be observed. These results should be useful for framng effectve clmate polcy response, both at the country and regonal levels.. Introducton The Assocaton of Southeast Asan Natons (ASEAN) s one of the most dynamc and dverse regons n the world. The regon comprses of ten countres. These countres have contrastng energy demand proles, levels of access to modern energy servces, and energy resource endowments. The energy demand n the regon has grown apprecably over the past four decades, drven essentally by hgh economc growth, underpnned by ncreased urbansaton and ndustralsaton. Ths has resulted n ncreased greenhousegas emssons. A large proporton (approxmately 0%) of these emssons have come from fosslfuel combuston (WRI 0). Despte large growth n energy consumpton, energy consumpton per capta n the regon (0.9 tonnes of ol equvalent) s consderably lower than the developed world average. Moreover, almost 0% of the populaton n the regon stll do not have access to electrcty (IEA 009). Wth expected ncreases n populaton (by 0% by 00; UN 0), coupled wth ever ncreasng urbansaton and ndustralsaton, energy demand s expected to ncrease substantally. Unless there are fundamental changes n the patterns of economc producton and fuelmx, the greenhousegas emssons are expected to grow sgncantly n the years to come. For example, accordng to IEA (009), the regon s share of global emssons could reach % n 00; currently ths share s around %. Such an ncrease n emssons s lkely to have mplcatons for the development of regonal clmate polces. Although the regon s currently not bound by any nternatonal agreement to lower ts emsson, the pressure to do so s lkely to arse soon. For example, accordng to IPCC, average global emssons need to be reduced to 0% of 990 emssons level by 00 n order to contan the temperature at C; ths s equvalent to lmtng emsson at around. mllon tonnes per person. The current regonal per capta emsson level (.7 mllon tonnes) has already exceeded ths target level.

2 In order to desgn effectve clmate polces that are n accord wth the regonal dversty as well as economc and populaton outlooks, t s mportant to understand how greenhousegas emssons for each country n the regon have evolved n the past. Understandng ths evoluton also means that any potental challenges for desgnng approprate polces can be dented and steps taken to address these challenges. Aganst ths backdrop, ths paper analyses the hstorcal trends n CO emssons (one of the major greenhousegases) for the ASEAN countres over the past four decades. Speccally, ths paper decomposes the change n CO emssons n order to analyse the relatonshp between the underlyng factors that drve emssons growth. The next secton provdes a contextual backdrop by brefly ntroducng the energyeconomyenvronment stuaton n the ASEAN. Secton dscusses the methodology employed, and data adopted for the analyss. The results are then presented and dscussed n secton. The nal secton provdes concludng remarks.. Energyeconomyenvronmental context ASEAN was rst establshed n 97. Its ntal members were Indonesa, Malaysa, Phlppnes, Sngapore and Thaland. Brune joned the group n 98, followed by Vetnam n 99, Laos and Myanmar n 997, and Camboda n 999, makng the ASEAN a group of 0 countres. ASEAN s one of the most dynamc and dverse regons n the world. Whle the regon s populaton ncreased by.9% per year between 97 and 009, ts economy grew by more than % per year (Table ). Over the same perod, the energy demand n the regon grew by.% per year. Ths has resulted n ncreased greenhousegas emssons, at an annual average rate of.%. The correspondng annual average ncreases n world s populaton, economc growth, energy consumpton, and greenhousegas emssons are.%,.%, % and.9% per year, respectvely. Not just n terms of absolute amount, the growth n emssons per person for the ASEAN s also hgher (.% per year) than the world average (0.% per year). Ths clearly shows that all ndcators for the ASEAN, partcularly CO emssons, have grown at a faster rate than the world average. Table : Key energyeconomyenvronmental ndcators for the ASEAN Gross Domestc Product Energy use (mllon) CO emssons share growth (bllon 000 USD) share growth (Mtoe) share growth (MtCO e) share growth % % pa % % pa % % pa % % pa Low ncome Camboda Laos. 0.0 na na 0 0. Myanmar na na Lowermddle ncome Indonesa Phlppnes Vetnam Uppermddle ncome Malaysa Thaland Hgh ncome Brune Sngapore ASEAN ,0. World,7,7., 9,90.,,787.0,08 8,999.9 Note: Most gures n the Table are roundedoff, and thus 0 reflects a very small amount, that s, less than 0.. Sources: World Bank (0), IEA (0a,b). The majorty of people n the regon lve wthn the mddle ncome ranges (Table ); 7% lve n the lowermddle ncome countres (Indonesa, Phlppnes and Vetnam), and 7% lve n the uppermddle ncome countres (Malaysa and Thaland). Indonesa alone s a home for more

3 than 0% of people n the regon, and accounts for more than twothrds of CO emssons. Thaland, Malaysa, Vetnam and Phlppnes collectvely accounts almost half of the regon s populaton, and % of total emssons. As these mddle ncome countres catchng up an ncome level of the more developed ones such asbrune and Sngapore, emssons are expected to rse. Between 97 and 009, all countres experenced ncreased CO emssons, both n absolute and per person terms. Indonesa, Thaland and Malaysa collectvely accounted for almost 80% of ths ncrease, whle accountng for % and % of growth n populaton and GDP, respectvely. Durng ths perod, these three countres were able to cross ther ncome threshold (that s, Indonesa became the lowermddle ncome country, whle Thaland and Malaysa became uppermddle ncome countres) by aggressvely promoted ther economy toward exports of ndustral products. The regon accounts for.% of the world s greenhousegas emssons (Table ). Whle ths represents only a small proporton of total world s emssons, t should be noted that ths number has ncreased notceably over the past four decades, when t contrbuted just 0.7% of world s greenhousegas emssons. Wth sgncant potental n terms of economc growth n the future (gven that the majorty of the countres n the regon are classed as low and lowermddle ncome countres), as well as requrements for energy servces to meet that growth, the regon s share of global emssons s expected to rse. Fgure shows the relatonshp between percapta ncome and percapta CO emssons for some ASEAN and nonasean countres. The gure clearly shows that there are two paths for emssons to grow as ncome rses one for the countres that are endowed wth abundant energy resources and the other for countres that rely on energy mports. CO emssons n resourcerch countres are generally lkely to be hgher than n countres that rely on mports, for a smlar ncome level. Take Brune and Sngapore, the two hgh ncome ASEAN countres, as an example. Whle an average emssons per person n Sngapore are around 9 Mt, they are 8 Mt n Brune (the country blessed wth ol and gas resources). CO emssons per person n Brune are about the same as other resourcerch developed natons, ncludng Australa and Canada. Fgure : CO emssons & GDP per person, selected countres Data sources: World Bank (0), IEA (0a).

4 The two uppermddle ncome countres n ASEAN, namely, Malaysa and Thaland, also follow smlar paths. CO emssons n resourcerch Malaysa are Mt per person, whle n energymportng country such as Thaland, they are about. Mt. The Fgure also shows that CO emssons n Thaland are slghtly hgher than countres whch share smlar characterstcs, n terms of resource avalablty as well as ncome level. Assumng that other less developed ASEAN countres were to follow ths path, t can be seen from the gure that ol and gasbased Indonesa as well as coalbased Vetnam wll soon jon emssons levels of Malaysa, whle others wll track emssons paths of Thaland and Sngapore.. Method and data Index decomposton analyss s a wdely appled technque for nvestgatng the contrbutory factors that drve hstorcal energy consumpton and assocated envronmental effects. There are a number of decomposton methods that can be employed for ths purpose (Lu and Ang 00). Ths paper employs the logarthmcmean dvsa ndex (LMDI) method proposed by Ang and Lu (00) because t has varous advantages over other ndex decomposton methods (Ang 00). Many studes have employed LMDI method to analyse factors underlyng CO emssons growth for varous countres or groups of countres (see, for example, Lee and Oh 00, Oh et al. 00, Sandu and Petchey 009, Zhao et. al 00). However, these studes dsentangle the sources of emssons growth nto at the most ve factors. Ths paper extends the number of factors consdered by decomposng annual change n CO emssons nto seven underlyng factors, namely, those assocated wth populaton growth, growth n per capta ncome (affluence), changes n the sectoral composton of output (structure), changes n sectoral energy ntensty (enduse efcency), changes n sectoral fuelmx, changes n efcency of transformng prmary energy nto nal energy (converson efcency), and changes n CO ntensty of prmary energy (carboncoefcent). In theory, a carboncoefcent of fuel should be constant based on the chemcal composton of dfferent types of fossl fuel. Ths however dffers n practce as any partcular type of fossl fuel, say coal, comes from varous supply sources whch vary n ther composton of both combustble and noncombustble components (IPCC 00). The carboncoefcent effect captures ths varaton. In formulatng a mathematcal expresson, let assume that CO emssons (C) from the combuston of fuel f n sector for each country can be wrtten as: = = Y Y FE P P Y Y FE FE PE FE C PE = P A S I M C C () where P = total populaton (person); Y = GDP (real US$); FE = nal energy consumpton (tons of ol equvalent, toe); PE = prmary energy consumpton (tons of ol equvalent, toe); A = GDP per person, whch represents level of affluence (real US$ per person) (=Y/P); S = share of sectoral output, whch represents economc structure (percent) (=Y /Y); I = sectoral energy ntensty (toe per real US$) (=FE /Y ); M = share of nal energy, or fuelmx (percent) (=FE /FE ); T = fuel converson, or transformaton, ntensty (toe prmary energy nput per toe nal energy output) (=PE /FE ); E = carboncoefcent of fuel (tons CO e per toe of prmary energy) (=C /PE ). Equaton s the bass for decomposng changes (n ths paper) n total CO emssons between any two perods. Ths decomposton s done both addtvely and multplcatvely. For the addtve decomposton, each of the component on the rghthandsde of Eq. s expressed n absolute terms (.e., MtCO e per toe). The addtve property of the LMDI method allows to express a gven change n emssons as the sum of a change n each contrbutory factor: T E

5 Pt C = ω Po + + At ω Ao M M, t, o + + S S T T, t, o, t, o + + I I E E, t, o, t, o () where the subscrpts o and t refer to the value of the varables at the start and end of the nterval of nterest. The varable ω s the logarthmc mean of CO emssons across the start and end perods and s dened as: = E E, t, o ω (). E, t E, o For the multplcatve decomposton, each of the component on the rghthandsde of Eq. s expressed as an ndex. Here, t expresses a gven change n emssons as the product of a change n each factor: Pt C = exp ω Po exp At exp ω Ao M M, t, o exp exp T T S S, t, o, t, o exp exp E E I I, t, o, t, o (). The varable ω s dened slghtly dffer to Eq., as: = ( E E ) ( E E ),, t, o, t o ω (). ( Et Eo ) ( Et Eo ) Each of the seven terms on the rghthandsde of Equatons and represents the contrbutory factors, as dened above, for total change n CO emssons between any two perods. Ths paper employed the above mathematcal formulatons to decompose hstorcal change n CO emssons for nne ASEAN countres (all except Laos). Laos s excluded n the analyss because of the lack of the most mportant varable for the analyss, whch s energy consumpton data. The paper employed tmeseres data coverng the perod between 97 and 009 for the varables consdered. However, due to the lack of complete tmeseres data for some countres, ths means that the analyss that covers the whole tmeperod can be conducted for just sx countres. For Brune, Vetnam and Camboda, the decomposton of CO emssons s conducted for the perods 97009, and 99009, respectvely., GDP, energy consumpton (both prmary and nal), and CO emssons data are taken from the Internatonal Energy Agency onlne databases (0a,b). The GDP data are based on purchasng power partes at US dollars constant prces n 000. Ths set of GDP data s selected so that t represents the comparable value of the country s output, whch s reflectng not just the varatons n exchange rates between currences, but also ts purchasng power. Ths output s assumed to produced from three sectors of the economy, ncludng agrculture, ndustral and servces. Thus, the structural effect captures n Equatons and reflects the change n relatve share of output from these three sectors. The transport sector s ncluded wthn the servces sector, as ts man purpose s to provde transport servces to the economy nstead of producng a consumable products. Data on ths sectoral share of output s taken from World Bank s world development ndcators database (World bank 0). There are ve types of nal energy ncluded n the analyss, whch nclude coal, ol, gas, nonfossl and electrcty. These nal energy are used drectly as an enduse energy n the three

6 economc sectors. Smlar to the structure effect, the fuelmx effect reflects the shft n relatve share of these nal energy use. Fnally, four types of prmary energy are ncluded coal, ol, gas and nonfossl. Not only that the prmary energy s used drectly n the form of nal energy n the enduse sectors, t s also used n the transformaton sectors to convert prmary energy nto nal energy such as electrcty. In ths paper, each of ths prmary energy s apportoned nto the three enduse sectors based on converson efcency of fuels, that s based on the average amount of prmary energy nput for convertng nto the equvalent amount of nal energy.. Results and dscussons Ths secton presents the contrbutons of varous effects to the changes n CO emssons n nne ASEAN countres (that s, all except Laos), as obtaned from the applcaton of Equatons and. The results are summarzed n Table, and detaled tmeseres trends are provded n Appendx A. The key results are as follows:. The level of affluence s by far the largest contrbutor to emssons growth n the ASEAN. It contrbuted to more than 0% (.7 Mt per year) of average annual ncrease n emssons over the perod Ths s clearly the largest contrbutor for most countres, except for Brune, Camboda and Phlppnes. In fact, Brune s the only country n the regon that experenced declnng affluence level throughout the study perod (as a result of lack of nvestment n sectors other than ol and gas), whch led to reduced CO emssons. In contrast, the growth n emssons due to ncreased affluence level s partcularly strong n Indonesa (. Mt per year), Thaland (. Mt per year), Vetnam (. Mt per year) and Malaysa (. Mt per year). The average annual CO emssons due to ncreased standard of lvng n the ASEAN has grown at an ncreasng rate. For example, CO emssons n the regon ncreased by 0.8 Mt per year durng the 970s, Mt per year durng the 980s,. Mt per year durng the 990s, and at a partcularly hgh rate of. Mt per year over the past decade. These trends reflect the patterns of economc growth n most countres n the regon, ncludng Indonesa, Malaysa, Sngapore, Thaland, Vetnam and Myanmar. Perhaps ths s a reflecton of economc development stage as countres move from a lowncome towards hghncome level. Take Sngapore as an example. Ths factor contrbuted to an ncrease of 0. Mt of CO per year durng the 970s. As ncomes ncreased, emssons also ncreased, at an annual rate of 0.8 Mt n 980s and. Mt n 990s. However, over the past decade ths rate has slowed to Mt per year. It s yet to be seen whether ths reflects a reversal of trend or just the result of shortterm economc mpacts assocated wth the global nancal crss n 008 (see gure n Appendx A). As the majorty of countres n the regon are stll classed as ether low ncome or lowermddle ncome countres (see Table ), the potental of ncreasng affluence to contrbute to future growth n emssons s sgncant. The recent global economc recesson does not seem to have apprecably mpacted upon the growth n emssons across the regon. The mpact appears to be concentrated n some of the exportorented countres such as Sngapore, Malaysa and Thaland, as well as n Camboda (see gure n Appendx A).

7 Table : Average annual change n energyrelated carbondoxde emssons CO Enduse Fuelmx Converson emssons efcency efcency ASEAN Brune Camboda Indonesa Malaysa Myanmar Phlppnes Sngapore Thaland Vetnam Carbon coefcent Mt Mt % Mt % Mt % Mt % Mt % Mt % Mt % 970s. 0. (9) 0.8 (7) 0. (9) 0. () 0. () 0. () 0. () 980s. 0. ().0 (7) 0. () 0. (9) 0. (8) 0. () 0. () 990s..0 (). () 0. () 0. (). (7) 0. () 0. () 000s.7. (). (88) 0. (). (). () 0. () 0. () Overall (9).7 () 0. () 0. (9) 0.9 () 0. (0) 0.0 (0) 970s (7) 0.0 () 0.0 (07) 0. (7) 0.0 () 0.0 (0) 0.0 () 980s (8) 0.0 () 0. () 0. (7) 0.0 (0) 0.0 (7) 0.0 () 990s () 0.0 (7) 0.0 (8) 0. () 0.0 () 0. (90) 0. (99) 000s () 0. () 0. (8) 0. (9) 0. (87) 0. () 0. (89) Overall (7) 0.0 (7) 0.0 () 0. (0) 0.0 (7) 0.0 () 0.0 () 970s 980s 990s () 0. () 0.0 (0) 0. (7) 0. (8) 0.0 (8) 0.0 () 000s (9) 0. (97) 0.0 (8) 0. (8) 0. (0) 0. (7) 0.0 () Overall () 0. (8) 0.0 (8) 0. (7) 0. (09) 0.0 () 0.0 () 970s. 0.9 (). () 0. (). (). (8) 0.7 () 0. () 980s.7. (). (7) 0. (9).9 (). (9).0 () 0. () 990s..7 (9).0 (7) 0. (). (). () 0. ().7 () 000s..9 ().0 (98).0 (8) 9. (7). () 0. () 0. () Overall 9.. (). () 0. (7). (8). (7) 0. () 0. () 970s. 0. () 0.9 (7) 0. () 0. (9) 0. () 0. () 0. () 980s () 0.9 () 0. () 0. () 0. (9). (7) 0. () 990s..9 ().8 () 0. (9) 0. () 0.8 (). (8). (9) 000s.0. ().7 () 0. (). ().0 () 0.7 () 0. (0) Overall.0. (7). () 0. () 0. () 0.7 () 0. (9) 0. (7) 970s (0) 0. () 0.0 () 0. (79) 0.0 (90) 0.0 (8) 0.0 (0) 980s (0) 0.0 () 0. (9) 0.0 (8) 0. () 0.0 (0) 0.0 (8) 990s (9) 0. (8) 0.0 (9) 0. (0) 0. (9) 0.0 () 0.0 (8) 000s (8) 0.8 () 0. () 0.7 (0) 0. () 0. () 0. () Overall (0) 0. (9) 0.0 () 0. (8) 0. () 0. (7) 0.0 (0) 970s. 0.8 () 0.9 (0) 0. (7) 0. (8) 0. (7) 0. () 0. () 980s () 0. () 0. (98) 0. (8) 0.0 (9) 0. () 0. (88) 990s.. (7) 0. () 0. () 0. ().7 () 0. (7) 0. (7) 000s 0.. (9).8 (7) 0. (8).8 (,9). (780) 0.9 () 0. () Overall..0 (8) 0.7 (8) 0. (7). (09) 0.7 (0) 0. () 0.0 () 970s () 0. (9) 0.0 () 0.0 () 0.0 () 0. () 0. () 980s (0) 0.8 (0) 0.0 () 0.0 () 0.0 () 0. (8) 0.0 () 990s..0 (). (7) 0.0 () 0. (7) 0. () 0. () 0. () 000s 0..0 (7).0 (7) 0. (8) 0. () 0. (9). (7) 0. (0) Overall ().0 (97) 0. (7) 0. (0) 0.0 () 0. (0) 0. (9) 970s.9 0. (0). () 0. () 0. () 0. (8) 0. (8) 0. (9) 980s. 0.7 (). (7) 0. () 0.7 () 0.7 () 0. () 0. () 990s 9.. (). (8) 0. (). ().8 (0) 0. () 0. () 000s ().9 (8) 0. () 0. (). (7). () 0.8 () Overall.. (0). (0) 0. () 0. (8). () 0. (8) 0. () 970s 980s (7) 0. (07) 0. (9) 0. (7) 0. (99) 0. () 0. (0) 990s. 0. (9). (0) 0. (0) 0.9 (). () 0. () 0. () 000s (). (8) 0. () 0.9 (). (7) 0. () 0. () Overall.0 0. (). (0) 0. () 0.8 ().0 () 0. (7) 0. () Note: Numbers n parenthess are percentage contrbuton of the average annual change n CO emssons. A negatve sgn means negatve contrbuton of CO emssons. 7

8 . The second major contrbutor to emssons growth n the regon s the effect of fuelmx. Changes n the type of nal energy consumpton over the past four decades contrbuted to % (0.9 Mt per year) of average annual ncrease n CO emssons. Ths s the result of ncreasng domnance of emssonntensve fossl fuels as energy sources. Data from the IEA (0b) suggests that the share of fossl fuels has consstently ncreased n most countres n the regon (except, n Sngapore), whch has led to ncreased CO emssons. These countres ncreased ther relance on coal and/or ol, ether for drect consumpton n the enduse sectors (n Camboda, Indonesa, Thaland and Vetnam) or as a fuel to produce electrcty (n Indonesa, Malaysa, Phlppnes and Thaland). Apart from Sngapore, Brune also experenced declnng trends n CO emssons, even though the country ncreased ts relance on fossl fuel, from a share (n total nal energy) of % n 97 to almost 70% n 009 (bd). However, ths was because of the changes n fuelmx from relatvely more emssonntensve ol to less emssonntensve gas. Whle Myanmar reduced the share of coal and ol n the economy, whch should have led to lower emssons, t also reduced ts relance on nonfossl (renewable) fuels. These were replaced by gas from the newlyfound large gaselds n the country such as Yetagun and Yadana. All these observatons are consstent wth the results for ndvdual country as shown n Table. Despte ncreasng global envronmental pressures, the average annual emssons resultng from ncreased relance on fossl fuels has grown at ncreasng rates. For example, regonal CO emssons grew by 0. Mt per year durng the 970s and 980s,. Mt per year durng the 990s and. Mt per year over the past decade. These trends are partcularly notceable for Indonesa, Vetnam, Camboda, and, to a smaller extent, Malaysa. Reversng these trends wll be a challengng, but not mpossble, task. For example, emssons n Thaland followed a smlar pattern to the countres mentoned above, untl the 990s. Over the past decade however emssons seem to have slowed. Ths could be partly a result of the government s ntatve to ncrease the share of ethanol, bodesel and natural gasbased vehcle fuels n place of tradtonal gasolne and desel fuels n lght of sustaned hgh nternatonal ol prces. If other countres were to reduced ther emssons from ths source, t would requre a smlarly strong polcy sgnal from the government, as well as access to alternatve nonfossl energy.. Increased populaton contrbuted to 9% (0.8 Mt per year) of average annual ncrease n CO emssons. It s obvous that countres wth hgh rates of populaton growth show strong rates of growth n emssons. Indonesa experenced the largest emssons growth n absolute amount (. Mt per year), gven ts largest populaton base. Phlppnes, Malaysa, Brune and Sngapore show the hghest rate n emssons growth as they experenced strong populaton growth over the past four decades. It s antcpated, based on Unted Naton s populaton projectons (UN 0), that Phlppnes, Malaysa and Brune wll contnue to show strong growth n CO emssons, whle Thaland wll experence a slower growth. v. Changes n the structure of economc output n the regon contrbuted to % (0. Mt per year) of average annual ncrease n CO emssons. Emssons from ths source have consstently ncreased at ths rate throughout the study perod. The producton structures for most countres (except Brune and Sngapore) have ncreasngly become concentrated towards energyntensve ndustral sectors. The share of ndustral output has ncreased almost exclusvely at the expense of agrculture output. Only n Myanmar dd t replace output from the servces sector. In contrast, the hgh ncome countres, such as Brune and Sngapore, show opposte trends. Ther economc structures have become concentrated towards lessenergyntensve servces sectors at the expense of the ndustral sector. These trends broadly follow the pattern of economc development as suggested by Medlock III (009). Based on ths pattern, t can be expected that most countres n the regon wll experence economc structural change over the next few decades, partcularly away from the ndustral sector, whch would lead to declnng CO emssons. However, no country besdes Sngapore has so far shown any nclnaton to move away from ths sector, whch suggests that emssons would contnue to ncrease. Even n Brune, where the share of ndustral output had reduced from 90% n 97 to about 0% n 998, the ndustral sector has 8

9 recently reganed ts mportance n the naton s producton structure, contrbutng more than 70% of total output n 009 (World Bank 0). Another aspect that needs mentonng s trade n goods and servces. Changes n the trade pattern, and the assocated movement of greenhousegas emssons emboded n tradable products, s an mportant ssue to understand n a globalzed world where demand n one country can be satsed from producton n other country. In a clmate change context, ths aspect gves rse to the ssue of carbon leakage. Data from the World Bank (0) shows that the ASEAN regon s a net exporter of goods, and a net mporter of servces. Gven that both agrcultural and ndustral goods are generally more energyntensve than servces, and that the regon currently reles heavly on fossl fuels to meet ts energy needs, ths mples that ASEAN s a net exporter of CO emssons. Moreover, the net export of goods from the regon has ncreased over the past decade, whle the net mport of servces has declned (bd). Thus, the antcpated economc structural change n the regon (as dscussed above) and economc polces that focus towards the future source of economc growth (that s, domestc consumpton versus exports) wll add further complexty to any global negotatons n an attempt to lmt world s greenhousegas emssons. v. The regon has acheved energy efcency gans at both enduse and converson levels. A combnaton of these mprovements has equally offset ncreased emssons from populaton growth, that s 0.8 Mt per year. Whle the ASEANwde reducton n enduse ntensty contrbuted more to reducng emssons (at 0. Mt per year) than dd an mprovement n converson efcency (0. Mt per year), the reducton n the former dd not occur consstently throughout the study perod, unlke the latter. Enduse energy ntensty for the whole regon declned over most of the perod, except durng the 990s. Lower energy prces durng that perod could be a reason for such an ncrease n energy ntensty. Enduse energy ntensty declned for most countres wthn the regon. Brune and Thaland are exceptons to ths. In Brune, energy ntensty ncreased throughout the study perod, whch led to an ncrease n assocated CO emssons. Snce the country s blessed wth abundant energy resources, partcularly ol and gas, the effectveness of energy usage for producton purpose s perhaps not a major prorty n the country. For Thaland, enduse energy ntensty declned durng the 970s and 980s when t was an agrculturebased economy. Snce then energy ntensty has ncreased as the country concentrated on ndustralsaton. Ths s a typcal trend for mddle ncome countres where they experenced ncrease n emssons due to deteroratng sectoral energy ntenstes. Ths s because these countres generally pursue economc development polces that foster growth n energyntensve sectors, as dscussed above, and also set energy prces that are artcally low (Lee & Oh 00). Indonesa and Phlppnes experenced sgncant mprovements n enduse energy efcency, resultng n annual average emssons reductons of. Mt and. Mt, respectvely. Unlke enduse ntensty, an mprovement n converson efcency occurred n all ASEAN countres. In Sngapore, ths has contrbuted to 0% (0. Mt per year) of average annual emssons reducton over the past four decades. Most of the reducton n CO emssons occurred over the past fteen years (see Appendx A). Thaland also followed the trend n Sngapore, wth overall emssons reducton of 0. Mt per year. Ths rate has exactly offset ncreased CO emssons from ncreased enduse ntensty n the country. v. For the regon as a whole, the effect of changes n carboncoefcent of sectoral prmary energy use durng on changes n CO emssons was neglgble. It caused CO emssons to ncrease by just 0.0 Mt per year. At a country level, the results are mxed. Whle t contrbuted to reduced emssons n Thaland and Vetnam, emssons from Malaysa and Indonesa have ncreased. Whle neglgble t s not possble to observe any trend n CO emssons from ths source; t fluctuates throughout the study perod. 9

10 . Conclusons Ths paper has analysed the hstorcal development of CO emssons and ts underlyng factors for nne ASEAN countres over the perod between 97 and 009, by usng the logmean dvsa ndex decomposton method. It analyses the nfluence of the followng factors on CO emssons populaton, affluence, structure, enduse efcency, fuelmx, converson efcency and carboncoeffcent. The major ndngs are as follows. Frst, the level of affluence contrbuted to most of the growth n CO emssons n sx out of nne countres. It s also the major contrbutor of emssons growth n the regon. Second, the fuelmx effect contrbuted strongly to CO emssons growth n the regon as emssonntensve fossl fuels ncreasngly become domnant fuel sources. However, ths was not the case n hgh ncome countres where emssons from ths source declned. Thrd, the populaton effect contrbuted postvely to emssons growth n every country n the regon. The countres wth hgh rate of populaton expanson also show strong rate of growth n emssons. Fourth, the structural effect contrbuted postvely to emssons growth n the regon as a whole, as the regonal producton structure has ncreasngly concentrated towards energyntensve ndustral sector. Ths effect was more profound n lowermddle ncome countres than n the uppermddle ncome countres. In hgh ncome countres, however, emssons from ths source actually declned. Ffth, the only effect that contrbuted negatvely to CO emssons growth s related to efcency, both for enduse and converson sectors. Whle mprovement n converson efcency contrbuted to emssons reducton across every country n the regon, the reducton n enduse ntensty occurred n all except two countres, one a resourcerch country and the other wth hgh level of ndustral sector. Last, the effect of changes n carboncoefcent was only neglgble, and no meanngly concluson can be drawn from ths factor. References Ang, B.W. and Lu, F.L., 00. A new energy decomposton method: perfect n decomposton and consstent n aggregaton, Energy, Vol., pp. 78. Ang, B.W., 00. Decomposton analyss for polcymakng n energy: whch s the preferred method? Energy Polcy, Vol., pp. 9. IEA (Internatonal Energy Agency), 009. World Energy Outlook 009, Organsaton for Economc Cooperaton and Development, Pars., 0a. CO Emssons from Fossl Fuel Combuston 0 edton, Organsaton for Economc Cooperaton and Development, Pars, (accessed November 0)., 0b. World Energy Statstcs 0 edton, Organsaton for Economc Cooperaton and Development, Pars, (accessed November 0). IPCC (Intergovernmental Panel on Clmate Change), 00. IPCC Gudelnes for Natonal Greenhouse Gas Inventores, Volume : Energy, publshed by the Insttute for Global Envronmental Strateges on behalf of IPCC, Hayama, Japan. Lee, K. and Oh, W., 00. Analyss of CO emssons n APEC countres: A tmeseres and a crosssectonal decomposton usng the log mean Dvsa method, Energy Polcy, Vol., pp Lu, F.L. and Ang, B.W., 00. Eght methods for decomposng the aggregate energyntensty of ndustry, Appled Energy, Vol. 7, pp.. Medlock III, K.B., 009. Energy Demand Theory, n J. Evans and L.C. Hunt (eds.) Internatonal Handbook on the Economcs of Energy, Edward Elgar. Oh, I., Wehrmeyer, W. and Mulugetta, Y., 00. Decomposton analyss and mtgaton strateges of CO emssons from energy consumpton n South Korea, Energy Polcy, Vol. 8, pp

11 Sandu, S. and Petchey, R., 009. End use energy ntensty n the Australan economy, ABARE research report 09.7, November. UN (Unted Natons), 0. World Prospects, World Bank, 0. World Development Indcators, (accessed October 0). WRI (World Resources Insttute), 0. Clmate Analyss Indcators Tool (CAIT) Verson 8.0, Washngton DC, (accessed November 0). Zhao, M., Tan, L., Zhang, W., J, M., Lu, Y. and Yu, L., 00. Decomposng the nfluencng factors of ndustral carbon emssons n Shanga usng the LMDI method, Energy, Vol., pp. 00.

12 Appendx A. Tmeseres decomposton results for each ASEAN country Brune Camboda Enduse ntensty Enduse ntensty Fuelmx Fuelmx Carbon coefcent Carbon coefcent Indonesa Malaysa Enduse ntensty Enduse ntensty Fuelmx Fuelmx Carbon coefcent Carbon coefcent Myanmar Phlppnes Enduse ntensty Enduse ntensty Fuelmx Fuelmx Carbon coefcent Carbon coefcent Sngapore Thaland Enduse ntensty Enduse ntensty Fuelmx Fuelmx Carbon coefcent Carbon coefcent Vetnam Enduse ntensty Fuelmx Carbon coefcent Note: These graphs are the results from the applcaton of Equaton.