Decomposition Analysis of Air Pollutants During the Transition and Post-Transition Periods in the Czech Republic

It is common in index decomposition studies to decompose an aggregate into five or more factors. This applies to energy-related carbon emissions since carbon emission coefficient by fuel type is relatively easy to derive. However, it is extremely demanding to derive the air pollutant emission coefficient by fuel type and by sector. As a result, air pollutant emissions have typically been decomposed into three factors — the scale, the structure and the intensity factor. Using a unique facility-level dataset, this is the first study that decomposes air pollutant emissions into five factors, i.e. by decomposing the emission intensity effect further into the fuel-intensity, the fuel-mix, and the emission-fuel intensity factors. Specifically, we use a 5-factor Logarithmic Mean Divisia Index (LMDI) method to decompose annual changes in the emissions of four types of air quality pollutants (SO2, NOx, CO and particulate matters) stemming from large stationary emission sources in the Czech Republic. Our analysis covers the period 1990 to 2016, during which the Czech economy transited towards a market economy. It also implemented strict environmental regulation to become a full member of the European Union in 2004. The emissions decreased cumulatively by 74% or more in the 1990s, remained at stable levels during the 2000s and declined again thereafter. We examine how the results differ if one relies on the ‘standard’ 3-factor and the 4-factor decompositions.