Main Drivers of Carbon Dioxide Emissions in Vietnam Trajectory 2000-2011: An Input-Output Structural Decomposition Analysis

Vietnam’s rapid economic growth has resulted in serious environmental concerns both at local and global scales. In-depth understanding of the key factors behind the rapid growth of CO2 emissions is of great significance in the development of local and global climate policies. Furthermore, this provides insight into how emerging economies can develop a low emission future. Recent works have demonstrated the effectiveness of the input–output model and structural decomposition analysis in analyzing how changes in different socio-economic factors affect energy-based CO2 emissions in the sectoral level using production and consumption-based perspectives. In the context of Vietnam’s economy, such aspects have not been fully explored in previous literature. This study thus analyzes the driving forces responsible for the increase in CO2 emissions in Vietnam from both production and consumption perspective during periods 2000 – 2007 and 2007 - 2011. The results using the production perspective indicate that during 2000 - 2011 the incremental change in CO2 emissions in Vietnam is driven mainly by the consumption structure (100.5%) and consumption volume (219.4%) which are offset by the decline in technology (-132.7%) and production structure (-22.5%). Population (24.1%) had a small effect on total CO2 emissions. Results using the consumption perspective show that even with large variations between the two periods, household, export and investment are the main drivers responsible for the sharp increase in CO2 emissions. This is offset by the decrease in import factor. Policy implications indicate that improving technology, adjusting production and consumption structure, and optimizing international trade are important factors for alleviating CO2 emissions in Vietnam.