IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v73y2014icp741-750.html
   My bibliography  Save this article

Tracking European Union CO2 emissions through LMDI (logarithmic-mean Divisia index) decomposition. The activity revaluation approach

Author

Listed:
  • Fernández González, P.
  • Landajo, M.
  • Presno, M.J.

Abstract

Aggregate CO2 emitted to the atmosphere from a given region could be determined by monitoring several distinctive components. In this paper we propose five decomposition factors: population, production per capita, fuel mix, carbonization and energy intensity. The latter is commonly used as a proxy for energy efficiency. The problem arises when defining this concept, as there is little consensus among authors on how to measure energy intensity (using either physical or monetary activity indicators). In this paper we analyse several measurement possibilities, presenting and developing a number of approaches based on the LMDI (logarithmic-mean Divisia index) methodology, to decompose changes in aggregate CO2 emissions. The resulting methodologies are so-called MB (monetary based), IR (intensity refactorization) and AR (activity revaluation) approaches. Then, we apply these methodologies to analyse changes in carbon dioxide emissions in the EU (European Union) power sector, both as a whole and at country level. Our findings show the strong impact of changes in the energy mix factor on aggregate CO2 emission levels, although a number of differences among countries are detected which lead to specific environmental recommendations.

Suggested Citation

  • Fernández González, P. & Landajo, M. & Presno, M.J., 2014. "Tracking European Union CO2 emissions through LMDI (logarithmic-mean Divisia index) decomposition. The activity revaluation approach," Energy, Elsevier, vol. 73(C), pages 741-750.
    • Handle: RePEc:eee:energy:v:73:y:2014:i:c:p:741-750
    DOI: 10.1016/j.energy.2014.06.078
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544214007774
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2014.06.078?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ang, B. W., 2004. "Decomposition analysis for policymaking in energy:: which is the preferred method?," Energy Policy, Elsevier, vol. 32(9), pages 1131-1139, June.
    2. Ang, B.W & Zhang, F.Q & Choi, Ki-Hong, 1998. "Factorizing changes in energy and environmental indicators through decomposition," Energy, Elsevier, vol. 23(6), pages 489-495.
    3. Ang, B.W., 1995. "Decomposition methodology in industrial energy demand analysis," Energy, Elsevier, vol. 20(11), pages 1081-1095.
    4. B. W. Ang & Ki-Hong Choi, 1997. "Decomposition of Aggregate Energy and Gas Emission Intensities for Industry: A Refined Divisia Index Method," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 59-73.
    5. Ang, B. W., 2005. "The LMDI approach to decomposition analysis: a practical guide," Energy Policy, Elsevier, vol. 33(7), pages 867-871, May.
    6. Shrestha, Ram M. & Anandarajah, Gabrial & Liyanage, Migara H., 2009. "Factors affecting CO2 emission from the power sector of selected countries in Asia and the Pacific," Energy Policy, Elsevier, vol. 37(6), pages 2375-2384, June.
    7. Albrecht, Johan & Francois, Delphine & Schoors, Koen, 2002. "A Shapley decomposition of carbon emissions without residuals," Energy Policy, Elsevier, vol. 30(9), pages 727-736, July.
    8. Farla, Jacco C.M & Blok, Kornelis, 2000. "The use of physical indicators for the monitoring of energy intensity developments in the Netherlands, 1980–1995," Energy, Elsevier, vol. 25(7), pages 609-638.
    9. G. Boyd & J. F. McDonald & M. Ross & D. A. Hansont, 1987. "Separating the Changing Composition of U.S. Manufacturing Production from Energy Efficiency Improvements: A Divisia Index Approach," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 77-96.
    10. Hatzigeorgiou, Emmanouil & Polatidis, Heracles & Haralambopoulos, Dias, 2008. "CO2 emissions in Greece for 1990–2002: A decomposition analysis and comparison of results using the Arithmetic Mean Divisia Index and Logarithmic Mean Divisia Index techniques," Energy, Elsevier, vol. 33(3), pages 492-499.
    11. Sun, J. W., 1998. "Changes in energy consumption and energy intensity: A complete decomposition model," Energy Economics, Elsevier, vol. 20(1), pages 85-100, February.
    12. Choi, Ki-Hong & Ang, B.W., 2012. "Attribution of changes in Divisia real energy intensity index — An extension to index decomposition analysis," Energy Economics, Elsevier, vol. 34(1), pages 171-176.
    13. Chung, Hyun-Sik & Rhee, Hae-Chun, 2001. "A residual-free decomposition of the sources of carbon dioxide emissions: a case of the Korean industries," Energy, Elsevier, vol. 26(1), pages 15-30.
    14. Zhang, Jinyun & Zhang, Yan & Yang, Zhifeng & Fath, Brian D. & Li, Shengsheng, 2013. "Estimation of energy-related carbon emissions in Beijing and factor decomposition analysis," Ecological Modelling, Elsevier, vol. 252(C), pages 258-265.
    15. Lee, Kihoon & Oh, Wankeun, 2006. "Analysis of CO2 emissions in APEC countries: A time-series and a cross-sectional decomposition using the log mean Divisia method," Energy Policy, Elsevier, vol. 34(17), pages 2779-2787, November.
    16. Park, Se-Hark, 1992. "Decomposition of industrial energy consumption : An alternative method," Energy Economics, Elsevier, vol. 14(4), pages 265-270, October.
    17. Sun, J.W & Ang, B.W, 2000. "Some properties of an exact energy decomposition model," Energy, Elsevier, vol. 25(12), pages 1177-1188.
    18. Liu, Lan-Cui & Fan, Ying & Wu, Gang & Wei, Yi-Ming, 2007. "Using LMDI method to analyze the change of China's industrial CO2 emissions from final fuel use: An empirical analysis," Energy Policy, Elsevier, vol. 35(11), pages 5892-5900, November.
    19. Ang, B.W. & Liu, F.L., 2001. "A new energy decomposition method: perfect in decomposition and consistent in aggregation," Energy, Elsevier, vol. 26(6), pages 537-548.
    20. X. Q. Liu & B. W. Ang & H.L. Ong, 1992. "The Application of the Divisia Index to the Decomposition of Changes in Industrial Energy Consumption," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 161-178.
    21. Ang, B.W. & Xu, X.Y., 2013. "Tracking industrial energy efficiency trends using index decomposition analysis," Energy Economics, Elsevier, vol. 40(C), pages 1014-1021.
    22. Oh, Ilyoung & Wehrmeyer, Walter & Mulugetta, Yacob, 2010. "Decomposition analysis and mitigation strategies of CO2 emissions from energy consumption in South Korea," Energy Policy, Elsevier, vol. 38(1), pages 364-377, January.
    23. Reitler, W. & Rudolph, M. & Schaefer, H., 1987. "Analysis of the factors influencing energy consumption in industry : A revised method," Energy Economics, Elsevier, vol. 9(3), pages 145-148, July.
    24. Ang, B.W. & Zhang, F.Q., 2000. "A survey of index decomposition analysis in energy and environmental studies," Energy, Elsevier, vol. 25(12), pages 1149-1176.
    25. Sun, J. W., 2003. "Dematerialization in Finnish energy use, 1972-1996," Energy Economics, Elsevier, vol. 25(1), pages 23-32, January.
    26. Patterson, Murray G, 1996. "What is energy efficiency? : Concepts, indicators and methodological issues," Energy Policy, Elsevier, vol. 24(5), pages 377-390, May.
    27. Zhao, Min & Tan, Lirong & Zhang, Weiguo & Ji, Minhe & Liu, Yuan & Yu, Lizhong, 2010. "Decomposing the influencing factors of industrial carbon emissions in Shanghai using the LMDI method," Energy, Elsevier, vol. 35(6), pages 2505-2510.
    28. Ang, B. W. & Lee, S. Y., 1994. "Decomposition of industrial energy consumption : Some methodological and application issues," Energy Economics, Elsevier, vol. 16(2), pages 83-92, April.
    29. Boyd, Gale A. & Hanson, Donald A. & Sterner, Thomas, 1988. "Decomposition of changes in energy intensity : A comparison of the Divisia index and other methods," Energy Economics, Elsevier, vol. 10(4), pages 309-312, October.
    30. Gale A. Boyd, 2005. "A Method for Measuring the Efficiency Gap between Average and Best Practice Energy Use: The ENERGY STAR Industrial Energy Performance Indicator," Journal of Industrial Ecology, Yale University, vol. 9(3), pages 51-65, July.
    31. Salta, Myrsine & Polatidis, Heracles & Haralambopoulos, Dias, 2009. "Energy use in the Greek manufacturing sector: A methodological framework based on physical indicators with aggregation and decomposition analysis," Energy, Elsevier, vol. 34(1), pages 90-111.
    32. Sato, Kazuo, 1976. "The Ideal Log-Change Index Number," The Review of Economics and Statistics, MIT Press, vol. 58(2), pages 223-228, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fernández González, P. & Presno, M.J. & Landajo, M., 2015. "Regional and sectoral attribution to percentage changes in the European Divisia carbonization index," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 1437-1452.
    2. Fernández González, P., 2015. "Exploring energy efficiency in several European countries. An attribution analysis of the Divisia structural change index," Applied Energy, Elsevier, vol. 137(C), pages 364-374.
    3. Fernández González, P. & Landajo, M. & Presno, M.J., 2013. "The Divisia real energy intensity indices: Evolution and attribution of percent changes in 20 European countries from 1995 to 2010," Energy, Elsevier, vol. 58(C), pages 340-349.
    4. Lenzen, Manfred, 2006. "Decomposition analysis and the mean-rate-of-change index," Applied Energy, Elsevier, vol. 83(3), pages 185-198, March.
    5. Jeong, Kyonghwa & Kim, Suyi, 2013. "LMDI decomposition analysis of greenhouse gas emissions in the Korean manufacturing sector," Energy Policy, Elsevier, vol. 62(C), pages 1245-1253.
    6. Vaninsky, Alexander, 2014. "Factorial decomposition of CO2 emissions: A generalized Divisia index approach," Energy Economics, Elsevier, vol. 45(C), pages 389-400.
    7. Ang, B.W. & Huang, H.C. & Mu, A.R., 2009. "Properties and linkages of some index decomposition analysis methods," Energy Policy, Elsevier, vol. 37(11), pages 4624-4632, November.
    8. Fernández, Esteban & Fernández, Paula, 2008. "An extension to Sun's decomposition methodology: The Path Based approach," Energy Economics, Elsevier, vol. 30(3), pages 1020-1036, May.
    9. Cansino, José M. & Sánchez-Braza, Antonio & Rodríguez-Arévalo, María L., 2015. "Driving forces of Spain׳s CO2 emissions: A LMDI decomposition approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 48(C), pages 749-759.
    10. P. Fernández-González & M. Landajo & M.J. Presno, 2013. "Factors Influencing Changes In Aggregate Energy Consumption. An European Cross-Country Analysis," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 13(2), pages 18-30.
    11. Md. Afzal Hossain & Jean Engo & Songsheng Chen, 2021. "The main factors behind Cameroon’s CO2 emissions before, during and after the economic crisis of the 1980s," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(3), pages 4500-4520, March.
    12. Ang, B. W., 2004. "Decomposition analysis for policymaking in energy:: which is the preferred method?," Energy Policy, Elsevier, vol. 32(9), pages 1131-1139, June.
    13. Wang, H. & Ang, B.W. & Su, Bin, 2017. "Assessing drivers of economy-wide energy use and emissions: IDA versus SDA," Energy Policy, Elsevier, vol. 107(C), pages 585-599.
    14. Ang, B.W. & Zhang, F.Q., 2000. "A survey of index decomposition analysis in energy and environmental studies," Energy, Elsevier, vol. 25(12), pages 1149-1176.
    15. Fernández González, P. & Landajo, M. & Presno, M.J., 2014. "Multilevel LMDI decomposition of changes in aggregate energy consumption. A cross country analysis in the EU-27," Energy Policy, Elsevier, vol. 68(C), pages 576-584.
    16. Su, Bin & Ang, B.W., 2012. "Structural decomposition analysis applied to energy and emissions: Some methodological developments," Energy Economics, Elsevier, vol. 34(1), pages 177-188.
    17. Suyi Kim, 2017. "LMDI Decomposition Analysis of Energy Consumption in the Korean Manufacturing Sector," Sustainability, MDPI, vol. 9(2), pages 1-17, February.
    18. de Freitas, Luciano Charlita & Kaneko, Shinji, 2011. "Decomposition of CO2 emissions change from energy consumption in Brazil: Challenges and policy implications," Energy Policy, Elsevier, vol. 39(3), pages 1495-1504, March.
    19. Jung, Seok & An, Kyoung-Jin & Dodbiba, Gjergj & Fujita, Toyohisa, 2012. "Regional energy-related carbon emission characteristics and potential mitigation in eco-industrial parks in South Korea: Logarithmic mean Divisia index analysis based on the Kaya identity," Energy, Elsevier, vol. 46(1), pages 231-241.
    20. Lin, Boqiang & Ouyang, Xiaoling, 2014. "Analysis of energy-related CO2 (carbon dioxide) emissions and reduction potential in the Chinese non-metallic mineral products industry," Energy, Elsevier, vol. 68(C), pages 688-697.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:energy:v:73:y:2014:i:c:p:741-750. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.