Decomposing manufacturing CO2 emission changes: An improved production-theoretical decomposition analysis based on industrial linkage theory.

ABSTRACT

Identifying key drivers of manufacturing CO2 emissions is critical to carbon reduction practices. For manufacturing, CO2 emissions are mainly determined by production capacity and production scale. However, traditional production-theoretical decomposition analysis (PDA) fails to consider production-scale-related drivers. To better support policy development and implementation, this paper improves PDA based on industrial linkage theory. The improved model can identify seven production-capacity-related drivers and five production-scale-related drivers, allowing a comprehensive understanding of CO2 emission drivers. Then this model is implemented to investigate CO2 emission changes in 18 manufacturing sectors in Hubei Province, China, from 2012 to 2017. Results show that manufacturing CO2 reduction efforts in Hubei Province have yielded some achievements, with reduced potential energy intensity and improved CO2 emission technical efficiency in most sectors. Changes in external market demand and final demand structure have contributed to CO2 reduction in most sectors. Results also reveal some problems in manufacturing in Hubei Province, such as the inability to improve CO2 emission technical efficiency and CO2 emission technology strength, the slow improvement of energy utilization technical efficiency and energy utilization technology strength, and the reduction of value-added rate.