Driving factors of CO2 emissions and inequality characteristics in China: A combined decomposition approach

Abstract

Decomposition analysis has become a popular tool to study CO2 emissions and, in this study, we developed a combined decomposition approach to emissions analysis by integrating the logarithmic mean Divisia index and production-theoretical decomposition analysis. Based on this novel approach, we investigated the driving factors of CO2 emissions in China over the latest Five-Year Plan period (2011–2015) and analyzed the inequality characteristics of such emissions. The results showed that 1) the peak value of CO2 emissions in China declined over the period; 2) the overall inequality presented a decreasing trend, whereas intragroup inequality presented a slightly increasing trend over the period; and 3) generally, the potential energy intensity effect contributed to the decrease in CO2 emissions in developed provinces, whereas the potential carbon factor effect accounted for the decrease in CO2 emissions in less-developed provinces. Based on our empirical results, we recommend that policy-makers consider several factors when implementing CO2 policies.