ESD-00222; No.

of pages: 10; 4C:

Energy for Sustainable Development xxx (2012) xxxxxx

Contents lists available at SciVerse ScienceDirect

Energy for Sustainable Development

Decomposing the decoupling of energy-related CO2 emissions and economic growth in Jiangsu Province
Wenwen Wang a, Rui Liu a, Ming Zhang b,, Huanan Li c
a b c

School of Science, China University of Mining and Technology, Xuzhou 221116, PR China School of Management, China University of Mining and Technology, Xuzhou 221116, PR China Key Laboratory of Ocean Energy Utilization and Energy Conservation of Ministry of Education, Dalian University of Technology, Dalian, 116024, PR China

a r t i c l e

i n f o

a b s t r a c t
Jiangsu Province has become one of the most developed regions in China. Economic growth in Jiangsu has occurred along with rising CO2 emission levels. A deeper understanding of how energy-related CO2 emissions have evolved in Jiangsu Province is very important in formulating future policies. Thus it is very necessary to investigate the driving forces governing CO2 emissions and their evolution. The decoupling index combined with the LMDI (Log Mean Divisia Index) method is used to analyze the contribution of the factors which inuence energy-related CO2 emissions in Jiangsu Province over the period 19952009. The results show that economic activity is the critical factor in the growth of energy-related CO2 emissions in Jiangsu Province, and the energy intensity effect plays the dominant role in decreasing CO2 emissions. The period from 2003 to 2005 represents a re-coupling effect; the periods 19961997 and 20002001 indicate strong decoupling effect, while the remaining time intervals show weak decoupling effect. Crown Copyright 2012 Published by Elsevier Inc. All rights reserved.

Article history: Received 3 July 2012 Revised 22 November 2012 Accepted 22 November 2012 Available online xxxx Keywords: Energy CO2 emissions LMDI method Decoupling index Jiangsu Province

Introduction Global warming has become a serious issue in the world since the late 1980s. Thus, the acceleration of environmental degradation resulting from ever-increasing energy use has raised the concern of energy analysts and policy makers regarding the adverse effects of energy-related CO2 emissions. In 2009, the Chinese government announced it would cut its CO2 emissions per unit of GDP by 40 45% in 2020 from 2005. Jiangsu Province has become one of the most developed regions in China, and its GDP (Gross Domestic Product) reached to 3.7 trillion yuan (in constant 1955 price) in 2009. At the same time, Jiangsu Province's aggregate nal energy consumption climbed to 239 Mtce (JSY, 2011). A deeper understanding of how energy-related CO2 emissions have evolved in Jiangsu Province is very important in formulating future policies. Thus it is very necessary to investigate the driving forces governing CO2 emissions and their evolution. To accomplish this, the proper approach is to decompose the evolution of CO2 emissions into the possible factors that affect such emissions. Introduced at the end of the 1970s to study the impacts of structural changes on energy consumption, index decomposition analysis (IDA) techniques have been extended to investigate the mechanisms inuencing energy consumption and its environmental side effects. In recent times, the IDA has been used successfully to quantify the impact of different factors on the change of energy consumption and CO2
Corresponding author. Tel./fax: +86 51683883159. E-mail address: zhangmingdlut@163.com (M. Zhang).

emissions. There are a variety of indexing methods that can be used in IDA, such as the Laspeyres index decomposition analysis and the Divisia index decomposition analysis (Ma and Stern, 2008). Based on the Laspeyres index decomposition analysis, an analysis had been made of energy consumption, efciency and savings in China in the period 19801994 by Sun (1998). Lise (2006) used this method given by Sun (1998) to study the energy-related CO2 emissions in Turkey. The Laspeyres index decomposition analysis is also utilized by Reddy and Ray (2010) to study energy consumption and energy intensity in Indian manufacturing industries. Zhou et al. (2010) introduced a Malmquist CO2 emission performance index (MCPI) for measuring changes in total factor carbon emission performance over time. Gonzlez and Martnez (2012) utilized a rened Laspeyres index to identify the factors that have inuenced the changes in the carbon dioxide emissions in the Mexican industrial sector as a whole. The LMDI method was utilized by Sheinbaum-Pardo et al. (2012) to estimate relative contributions of activity, structure, real intensity, and fuel switching changes in different Mexican industrial subsectors. Ang (2004) provided a useful summary of the various methods and their advantages and disadvantages and concluded that the LMDI method was the preferred method, due to its theoretical foundation, adaptability, ease of use and result interpretation, along with some other desirable properties in the context of decomposition analysis. Many studies have used the LMDI method to identify quantitatively the relative impact of different factors on the changes in energy consumption and CO2 emissions. The LMDI technique was used by Chung et al. (2011) to evaluate the respective contributions of changes of residential energy use in Hong Kong. The LMDI

0973-0826/$ see front matter. Crown Copyright 2012 Published by Elsevier Inc. All rights reserved. http://dx.doi.org/10.1016/j.esd.2012.11.007

Please cite this article as: Wang W, et al, Decomposing the decoupling of energy-related CO2 emissions and economic growth in Jiangsu Province, Energy for Sustainable Development (2012), http://dx.doi.org/10.1016/j.esd.2012.11.007

W. Wang et al. / Energy for Sustainable Development xxx (2012) xxxxxx

technique was also utilized by Tan et al. (2011) to examine the driving forces for reducing China's CO2 emission intensity between 1998 and 2008. Since Ernst et al. introduced the notion of decoupling, the concept has achieved global recognition as a signicant concept for successful economyenvironment integration (Enevoldsen et al., 2007). The concept developed as an indicator by OECD (2010) has been widely used to study the decoupling analysis by a variety of studies. For example, Climent and Pardo (2007) investigated the relationship between GDP and energy consumption in Spain by taking into account several decoupling factors. Diakoulaki and Mandaraka (2007) evaluated the progress made in 14 EU countries in decoupling emissions from industrial growth. The occurrence of a decoupling between the growth rates in economic activity and CO2 emissions from energy consumption in Brazil from 2004 to 2009 was examined by Freitas and Kaneko (2011). Liu (2011) used environmental Kuznet's curve (EKC) to coin the term environmental poverty to refer to the lack of the healthy environment needed for society's survival and development as a direct result of human-induced environmental degradation. A number of different concepts have been used to express the different aspects of decoupling. Nowadays, eight kinds of measuring methods for decoupling exist. But there is no uniform view or consensus about which is the best decoupling indicator method (Zhong et al., 2010). Moreover, the decoupling index is more effective when combined with other evaluation methods such as the decomposition method (Freitas and Kaneko, 2011). Though many studies have focused on China's energy consumption and its energy-related CO2 emissions, no study has been devoted to decomposing the decoupling of energy-related CO2 emissions and economic growth in Jiangsu Province. For a deeper understanding of how energy-related CO2 emissions have evolved in Jiangsu Province, this paper serves as a preliminary attempt to apply the decoupling index combined with the LMDI method to analyze the contribution of the factors which inuence energy-related CO2 emissions in Jiangsu Province over the period 19952009. Another highlight of this paper is that both, the whole Jiangsu economic structure and energy types consumed by the whole Jiangsu economy have been considered simultaneously. The remainder of this paper is organized as follows: Methodology section presents the methodology of the study. Data description section discusses data used. The results obtained are presented in the Results and discussion section. The conclusions drawn are summarized in the Conclusions section. Methodology Firstly, the method of estimation of CO2 emissions is presented in this section. Then we give the denition of effect factor and LMDI model formulation. Finally, the decoupling index formulation based on LMDI model is presented. In this paper, the GDP (Gross Domestic Product) is used to measure economic activity. The symbol denitions are as follows. C Cit Eit Ejt t Eij EFjt CSj Oj M GDP t
t

GDPit  the value added of the ith sector in year t; t EI t Ei GDPt is the energy intensity of the ith sector in year t; i i t ESt GDPi GDPt is the economic share of the ith sector in year t; and i t FSt Ej Et is the jth energy form share to total energy consumption in j year t.

Estimation of CO2 emissions Following the method given by the IPCC (2006), total CO2 emissions are estimated based on energy consumption and carbon emission factors by fuel as follows.   t t t t C C i Eij EF j 1CSj M
i j

The carbon emission factors (EF) for different fuels are given in Table 1. Because the 19952009 period analyzed in this paper is a relatively short term, this paper assumes that the carbon emission factors of all energy forms listed in Table 1 are constant. In fact, while these coefcients have changed over time because of a change in grade of fuel, these changes are so small that they are negligible when we analyze the macro changes in CO2 emissions. The carbon emission factors of heat and electricity, however, are changing because the fuel mix used in the generation of electricity is always changing, and technological improvements in generation are also always driving the decrease of coal consumption used in electricity generation. The carbon emission factors of electricity and heat are calculated based on the use of individual fossil fuel used in power and heat generation. Because the fuel used as a raw material for manufacture of products is excluded from the total energy consumption, CS is zero. These values are assumed to be constant over the time period of the study (Zhang et al., 2009). Denition of factor and LMDI model formulation The energy consumption in year t(E t) can be expressed as in Eq. (2). E EI i ESi GDP
i t t t t

The amount C t of CO2 emissions generated in year t from a certain amount of energy E t is determined by the emission factor characterizing the corresponding form of energy, as the product shown in Eq. (3). C E FSj F j
j t t t t

total CO2 emissions in year t (in 10 tons); total CO2 emissions of the ith sector in year t; total energy consumption of the ith sector in year t; total energy consumption of the jth fuel type in year t; total energy consumption of the ith sector based on fuel type j in year t; carbon emission factor of the jth fuel; the fraction of the jth fuel is not oxidized as raw materials in year t; the fraction of carbon oxidized based on fuel type j; the molecular weight ratio of carbon dioxide to carbon (44/12); the value added in year t;

Table 1 Carbon emission factors and fractions of carbon oxidized. Source: IPCC (2006). Fuel Coal Coke Coke oven gas Crude oil Gasoline Kerosene Diesel oil Fuel oil LPG (liqueed petroleum gas) Renery gas Other petroleum products Natural gas EF (t-C/TJ) 25.8 29.2 12.1 20.0 19.1 19.6 20.2 21.1 17.2 15.7 20.0 15.3

Please cite this article as: Wang W, et al, Decomposing the decoupling of energy-related CO2 emissions and economic growth in Jiangsu Province, Energy for Sustainable Development (2012), http://dx.doi.org/10.1016/j.esd.2012.11.007

W. Wang et al. / Energy for Sustainable Development xxx (2012) xxxxxx

Combining Eqs. (2) and (3), we can obtain the following identity: C EIi ESi GDP FSj F j
i;j t t t t t t

where, Fjt = EFjt (1 CSj) M. Both, the whole Jiangsu economic structure and energy types consumed by the whole Jiangsu economy are studied simultaneously by Eq. (4). According to the LMDI method given by Ang (2004), the change of CO2 emissions between a base t year 0 and a target year t, denoted by Ctot, can be decomposed into the following determinant factors:
t (i) The economic activity effect (denoted by Cgdp ), reecting changes in the total produced value added (GDP) from the Jiangsu, measured in 1955 constant prices; t (ii) The energy intensity effect (denoted by Cei), reecting changes in the ratio of industrial energy consumption to its produced value added; t (iii) The economic structure effect (denoted by Ces), reecting changes in the relative shares of industry in total value added; t (iv) The energy mix effect (denoted by Cfs), reecting changes in the relative shares of energy forms in total energy consumption; and (v) The emission factor effect (denoted by Cft), reecting changes in the average emission factor of energy use. As a constant emission factor for conventional fuels, this factor is described as the energy mix used in utilities for power and heat generation. t Thus, the difference Ctot is decomposed into its components in additive form, as illustrated in Eq. (5):

decrease in energy-related CO2 emissions. Thus, the effort in absolute terms or absolute effort (F t) during the period starting from the base year 0 up to year t can be represented as the sum of the 4 effect factors identied in Eq. (5), or as the difference between total change and economic activity effect: F C tot C act C es C ei C fs C f :
t t t t t t t

If the sum of the 4 factors results in reducing CO2 emissions, the value F t will be negative. In order to assess the degree to which these efforts are effective in terms of the dissociation between economic growth and CO2 emissions, the decoupling index D t during the period from a base year 0 to a target year t is dened as follows: t If Cgdp 0, then D
t

F t : C t gdp

t If Cgdp b 0, then

F t C t gdp C t gdp

The decoupling index D t takes the following values: (i) D t 1, denoting strong decoupling efforts; (ii) 1 > D t > 0, denoting weak decoupling efforts; and (iii) D t 0, denoting no decoupling efforts (re-coupling). Because Eq. (8) refers to a positive economic activity effect, one can determine a decoupling index for each effect from that formula, and the obtained value helps in identifying the relative contribution of each factor to the overall decoupling progress. Furthermore, the overall decoupling index results as the sum of these partial indices: D
t

t C tot

t C gdp

t C ei

t C es

t C fs

t C f :

Each effect in the right hand side of Eq. (5) can be computed as follows:
t C gdp t   GDP t 0 L C ij ; C ij ln 0 GDP i;j

! 5a

C fs C f C t C t t t t t es t ei t t Des Dei Dfs Df : t C gdp C gdp C gdp C gdp

10

t C ei

t   EI i t 0 L C ij ; C ij ln 0 EIi i;j

! 5b ! 5c

Data description The research period in this paper starts in 1995 and ends in 2009. In Jiangsu Province, the data has been collected from various issues of the Jiangsu Statistical Yearbook (JSY, 2011) and the China Energy Statistical Yearbook (CESY, 19911996, 19971999, 20002002, 2003, 2004. 2005, 2006, 2007). The GDP is measured in 10 9 yuan in constant 1955 price. The energy consumption data is converted into standard coal consumption in 10 3 tce. To prepare the data for undertaking the decomposition analysis by industrial sector, Jiangsu Province economy is divided into three aggregated industries, namely the primary, secondary, and tertiary industries. The primary industry includes agriculture and its related activities: farming, forestry, husbandry, secondary production and shing. The secondary industry sector is comprised of mining, manufacturing, water supply, electricity generation and supply, steam, the hot-water and gas sectors, and construction. The tertiary industry sector is the rest. Energy sources used by Jiangsu Province are aggregated into four groups: primary energy, secondary energy, electricity and heat. The primary energy is composed of coal, oil, natural gas, hydro and nuclear energy. Secondary energy includes coke, coke oven gas, gasoline, kerosene, diesel oil, fuel oil, liqueed petroleum gas (LPG), renery gas, and other petroleum products. According to the study presented by Paul and Bhattacharya (2004), CO2 emissions from power and heat generation are assigned to three industrial sectors in the economy

C es

t   ESi t 0 L C ij ; C ij ln 0 ESi i;j

  FSt t t 0 j C fs L C ij ; C ij ln FS0 i;j j

! 5d

!   Ft t t 0 j C f L C ij ; C ij ln 0 : Fj i;j   Here, C t EIt ESt GDP t FSt F t ; L C t ; C 0 ij i j ij ij i j In the index number, we form C t gdp C t tot
t t C t C t C ei C es fs f C t C t C t C t tot tot tot tot C t C 0 ij ij lnC t lnC 0 ij ij

5e

! 100% 100%: 6

Decoupling index formulation According to the denition given by Diakoulaki and Mandaraka (2007), effort that includes measures reducing energy intensity, fuel switching, and shifts toward less energy intensive industry is a general term referring to all actions directly or indirectly inducing a

Please cite this article as: Wang W, et al, Decomposing the decoupling of energy-related CO2 emissions and economic growth in Jiangsu Province, Energy for Sustainable Development (2012), http://dx.doi.org/10.1016/j.esd.2012.11.007

W. Wang et al. / Energy for Sustainable Development xxx (2012) xxxxxx

Table 2 The related energy data (103 tce ) and GDP (109 yuan). Primary Coal 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1074 832 793 443 411 430 362 539 468 429 532 435 450 451 450 Oil 1101 1313 1369 1396 1408 1428 1414 1440 1473 1584 1686 2029 2067 2110 2351 Natural gas 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Electricity and heat 81 86 91 93 87 73 71 59 60 61 36 31 30 29 31 Secondary Coal 32,086 30,518 27,115 29,363 28,172 25,611 22,585 23,897 26,842 40,640 51,243 55,116 61,887 68,990 71,281 Oil 9049 9261 10,813 10,635 9557 12,768 8712 8373 7982 14,003 16,145 11,518 11,361 10,524 12,696 Natural gas 11 12 11 13 19 31 29 128 60 315 1160 1690 2403 3443 3454 Electricity and heat 23,095 23,271 25,253 26,617 33,804 35,171 41,455 44,030 47,056 49,881 59,104 73,523 83,922 10,4546 12,7711 Tertiary Coal 3573 3256 3952 2679 2585 2111 1696 1675 1825 1369 2025 1360 1398 1332 1227 Oil 3265 3847 3868 4337 4584 5268 6676 7733 8485 10,039 11,195 11,763 12,884 14,637 15,544 Natural gas 12 4 3 4 8 0 0 5 21 35 181 333 528 1076 1467 Electricity and heat 142 157 175 191 202 239 255 268 313 365 1670 1331 1464 2698 3230 GDP Primary 119 134 143 148 150 149 155 154 156 176 173 181 206 226 243 Secondary 374 418 471 513 565 632 693 778 915 1088 1246 1441 1637 1825 2019 Tertiary 217 264 308 354 395 437 488 540 605 669 783 928 1101 1277 1482

proportional to their consumption of electricity. The related data used in this paper is listed in Table 2. Results and discussion Analysis of energy-related CO2 emissions in Jiangsu Province Since China launched its open-door policy and economic reform in late 1978, Jiangsu Province has experienced spectacular economic growth, with its GDP increasing at the average annual rate of about 12.6% over 19952009. Along with the rapid economic development, energy consumption rose from 73,489.2 10 3 tce in 1995 to 239,440 10 3 tce in 2009, representing an annual average growth rate of 8.8%. Accompanying the growth in fossil fuel use, Jiangsu's energyrelated CO2 emissions have grown rapidly. The corresponding CO2 emissions from fossil fuels in Jiangsu Province over 19952009 have been calculated based on the method presented in the Estimation of CO2 emissions section. As shown in Fig. 1, the total CO2 emissions in Jiangsu rose from 187,814 10 3 t in 1995 to 520,292 10 3 t in 2009, with an average annual growth rate of about 7.5%. It is apparent that CO2 emissions as a total increased at a rapid pace between 2002 and 2009. In fact, CO2 emissions of the Jiangsu economy increased 148.07% from 2002 to 2009. It is also observed that emissions of the primary industry stagnated while emissions of the secondary and tertiary industries increased in general. Fig. 2 displays the percentage shares of the industries in total CO2 emissions, which shows that the share of the primary industry in total
Primary 55000 50000

emissions declined while the share of the secondary industry increased. We can see that CO2 emissions in Jiangsu Province are dominated by the secondary and tertiary industry sectors during the period 19952009. However, during the study period the share of the primary industry continuously declined from about 6% to 1.5% and the share of the secondary industry increased from about 80% to 82%. The share of the tertiary industry sector also increased slightly from about 14% to 16.5%. The tendency of the share of CO2 emissions by terminal energy type over time is shown in Fig. 3. There is a substitution between the increasing shares of the electricity and heat (from about 37% in 1995 to about 53% in 2009) and a decreasing share of coal and its products (from about 48.5% in 1995 to about 33.6% in 2009). However, more than 95% of the fuel used for thermal power and heat generation consisted of coal and its products during this period. Thus, coal and its products account for more than 83% of total CO2 emissions, which shows that energy supply in Jiangsu Province mainly depends on coal and its products. However, the share of oil products and natural gas remains about 15% during the study period. In this paper, CO2 emission intensity, measured by g/yuan, is dened as the ratio of energy-related CO2 emissions to economic activity. CO2 emission intensity for the primary, secondary, and tertiary industries as well as the total economy are presented in Fig. 4. It is evident that the secondary industry has the highest CO2 emission intensity while the primary industry has the lowest CO2 emission intensity throughout the period. Even though CO2 emission intensity of the primary industry steadily decreased from 1995 to 2009, it did not alter its position in terms of being the lowest CO2 emission intensity
Secontary Tertiary

CO2 emissions (10000t)

45000 40000 35000 30000 25000 20000 15000 10000 5000 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Fig. 1. Industrial CO2 emissions in Jiangsu Province.

Please cite this article as: Wang W, et al, Decomposing the decoupling of energy-related CO2 emissions and economic growth in Jiangsu Province, Energy for Sustainable Development (2012), http://dx.doi.org/10.1016/j.esd.2012.11.007

W. Wang et al. / Energy for Sustainable Development xxx (2012) xxxxxx

Secondary 100% 95% 90% 85% 80% 75% 70%

Primary

Tertiary

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Fig. 2. Shares of industries in total CO2 emissions.

industry. It is also observed that the CO2 emission intensity of the tertiary industry decreased during the study period. Even though a uctuation in the CO2 emission intensity of the secondary industry during the period existed, it is clear that there was a decrease of 47.3% in the CO2 emission intensity of the secondary industry over the period 19952009. There was also a continual decrease in CO2 emission intensity in the secondary industry over the period 19952003, and it was increasing a bit since 2002 too. From 2004, CO2 emission intensity slightly decreased. CO2 emission intensity in the secondary industry is obviously higher than in the primary and tertiary industries.

Overall, the level of CO2 emission intensity for the whole economy is similar with the secondary industry. Decomposition analysis The ndings obtained from the decomposition analysis with the help of Eq. (5) in the Denition of factor and LMDI model formulation section are shown in Tables 3 and 4 and Fig. 5. The components of t the decomposition analysis, i.e. Cgdp (economic activity effect), t t t Ces (economic structure effect), Cei (energy intensity effect), Cfs

Coal Products 100%

Oil Products and Natural Gas

Electricity and Heat

80%

60%

40%

20%

0%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Fig. 3. Shares of CO2 emissions by terminal energy type.

Total 450

Primary

Secondary

Tertiary

CO2 emissions intensity(g/yuan)

400 350 300 250 200 150 100 50 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Fig. 4. Tendency of CO2 emission intensity in Jiangsu.

Please cite this article as: Wang W, et al, Decomposing the decoupling of energy-related CO2 emissions and economic growth in Jiangsu Province, Energy for Sustainable Development (2012), http://dx.doi.org/10.1016/j.esd.2012.11.007

W. Wang et al. / Energy for Sustainable Development xxx (2012) xxxxxx

Table 3 Complete decomposition of energy-related CO2 emission change (19952009).a

t Cgdp t Cesb t Ceib t Cfsb tb Cf t Ctotb

19951996 19961997 19971998 19981999 19992000 20002001 20012002 20022003 20032004 20042005 20052006 20062007 20072008 20082009 19952009
a b

26,151 22,875 17,728 16,950 17,974 18,014 19,523 28,999 38,257 44,998 58,107 61,946 57,248 59,727 488,496

3703 96 1161 1202 2935 85 2803 5350 5949 1629 301 5048 4907 6873 2136

24,848 20,517 10,736 5968 15,498 17,804 10,823 18,652 17,150 22,005 20,910 7604 23,702 13,549 76,956

4979 3093 3207 10,395 5838 4347 5552 12,881 12,128 4461 972 1331 38,537 32,102 45,483

2068 2144 370 1299 1182 971 1204 763 919 1418 4849 12,868 746 1383 31,443

511 2976 2995 490 10,066 5024 15,852 27,814 72,566 71,674 31,076 37,758 36,759 32,918 332,478

Data source: CSY; CESY; authors' calculation; unit: 103 t. Negative values indicate decreasing CO2 emissions.

Table 4 Complete decomposition of energy-related CO2 emission change in percentage (1995 2009).a
t Cgdpb t Cesb t Ceib t Cfsb tb Cf t Ctot

19951996 19961997 19971998 19981999 19992000 20002001 20012002 20022003 20032004 20042005 20052006 20062007 20072008 20082009 19952009
a b

5122.2 768.6 592.0 3456.9 178.6 358.6 123.2 104.3 52.7 62.8 187.0 164.1 155.7 181.4 146.9

725.3 3.2 38.8 245.2 29.2 1.7 17.7 19.2 8.2 2.3 1.0 13.4 13.4 20.9 0.6

4866.9 689.4 358.5 1217.2 154.0 354.4 68.3 67.1 23.6 30.7 67.3 20.1 64.5 41.2 23.2

975.1 103.9 107.1 2120.0 58.0 86.5 35.0 46.3 16.7 6.2 3.1 3.5 104.8 97.5 13.7

405.1 72.0 12.4 264.9 11.7 19.3 7.6 2.7 1.3 2.0 15.6 34.1 2.0 4.2 9.5

100 100 100 100 100 100 100 100 100 100 100 100 100 100 100

Data source: CSY; CESY; authors' calculation; unit: %. Negative values indicate decreasing CO2 emissions.

(energy mix effect) and Cft (emission factor effect) are calculated as given in Eqs. (5a)(5e), respectively. As can be seen from Fig. 5, economic activity is the critical factor in the growth of energy-related CO2 emissions in Jiangsu Province, which is consistent with that obtained by Ma and Stern (2008) and Li et al. (2011). The economic activity effect makes the continual

increase of CO2 emissions over the period 19952009, as shown in Table 3. The accumulated (period-wise) effect is an increase of 488,496 10 3 t, which accounts for about 147% of the total change in absolute value. The economic activity of Jiangsu economy (GDP) and CO2 emissions are presented in Fig. 6, which shows an upward trend both in CO2 emissions and GDP over this period. Given that Jiangsu has been the most rapidly expanding economy over the past 15 years, it is not surprising that economic growth measured in GDP was overwhelming. Our results also show that the energy intensity effect plays the dominant role in decreasing CO2 emissions, which is consistent with the results obtained by Sun (1998) and Ma and Stern (2008). The accumulated energy intensity effect is a decrease of 76,956 10 3 t, which accounts for about 23% of the total CO2 emissions in absolute value. The changes of Jiangsu energy intensities for the period from 1995 to 2009 are presented in Fig. 7, which shows that total energy intensity has decreased by about 38% from 1995 to 2009. It is clear that the decrease of energy intensity of the tertiary industry is the biggest and reaches about 55%. The largest decrease in the tertiary industry took place in 1998 and 1999, and it has come back to steady state since 1999. At the same time there has been a change in energy intensity in the primary of about 38%. The energy intensity of the secondary sector decreased continually over the period of 19952003, and it is increasing a bit from 2004. The decrease in energy intensity may be due to new process, new technologies and new equipment, which were accompanied by the extensive application of energysaving technologies and the advancement of management level. Since the early 1980s, the Chinese government has formulated and implemented approximately 30 energy conservation laws concerning the administrative, legislative, economic and technological aspects of energy conservation. After years of preparation, China's Energy Conservation Law was enacted on November 1, 1997 and came into force on January 1, 1998 (Zhang, 2000). However, Jiangsu's energy intensity has increased noticeably since 2003. The reason may be that energy-intensive sub-sectors or products have expanded too fast to be offset by the energy efciency improvements. As shown in Fig. 7, the trend of total energy intensity is the same as that of the secondary industry. What is more, another reason may be Jiangsu's accelerated industrialization and urbanization which required more energyintensive products. Furthermore, China's particular local authority performance appraisal and ofcial promotion systems have also induced high-level energy-consuming investment activities. As shown in Table 3 and Fig. 5, the energy mix effect is another factor that decreased CO2 emissions over the study period, which is also consistent with the result obtained by Ma and Stern (2008). The accumulated effect was a decrease of 45,483 10 3 t, which only accounts for about 13.7% of the total CO2 emission change in absolute

50000 40000 30000 20000 10000 0 -10000 Economic Activity Economic Structure Energy Intensity Energy Mix Emission Factor

Unit:10000t

Fig. 5. Decomposition results: components of the change in CO2 emissions (aggregated).

Please cite this article as: Wang W, et al, Decomposing the decoupling of energy-related CO2 emissions and economic growth in Jiangsu Province, Energy for Sustainable Development (2012), http://dx.doi.org/10.1016/j.esd.2012.11.007

W. Wang et al. / Energy for Sustainable Development xxx (2012) xxxxxx

GDP 40000 35000

CO2 Emissions 60000

50000 30000

GDP (10^8yuan)

20000 15000

30000

20000 10000 5000 0 10000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Fig. 6. Economic activity of Jiangsu economy (GDP) and CO2 emissions.

value. The tendency of the share of terminal energy consumption over time is shown in Fig. 8. There is a substitution between the increasing shares of the electricity and heat (from about 31% in 1995 to about 54% in 2009) and a decreasing share of the coal and its products (from about 50% in 1995 to about 30% in 2009). However, more

than 95% of fuel for thermal power and heat generation is coal and its products during this period. The use of natural gas has increased from 2.2 Mtce in 1995 to 492.1 Mtce in 2009, following an annual growth rate of about 47%. However, the share of natural gas to the total terminal energy consumption only accounted at 2% in 2009. In terms of fuel

Total 200 180 160 140

Primary

Secondary

Tertiary

Unit: g/yuan

120 100 80 60 40 20 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Fig. 7. Tendency of energy intensity in Jiangsu.

Coal Products 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Oil Products

Natural Gas

Electricity and Heat

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Fig. 8. The share of terminal energy consumption type.

Please cite this article as: Wang W, et al, Decomposing the decoupling of energy-related CO2 emissions and economic growth in Jiangsu Province, Energy for Sustainable Development (2012), http://dx.doi.org/10.1016/j.esd.2012.11.007

CO2 (10^4t)

25000

40000

W. Wang et al. / Energy for Sustainable Development xxx (2012) xxxxxx

100

99

98

97

96

95

94

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Fig. 9. Share of coal and its products in total energy consumption for electricity generation.

type used in nal consumption, the use of raw coal accounts for over 30% of the total energy consumption during the study period. The above reasons may explain why the energy mix effect decreases CO2 emissions. Table 3 also shows that emission factor effect decreases CO2 emissions except for the years 1997, 1998 and 2001, with an accumulated effect 31,443 10 3 t. In 2009, electricity supply in Jiangsu mainly depended on thermal power, which accounts for about 89% of the total electricity supply (Zhang and Wang, 2012). Fig. 9 shows the share of coal and its products in total energy consumption for generation, which demonstrates that coal and its products are the main fuels for thermal power generation. As shown in Fig. 9, there is also a slight decrease in the share of coal and its products in total energy consumption for electricity generation over the period 19952003, but coal and its products are the main fuels for thermal power generation. Efforts have been made toward developing large-size, coalred power plants in the power and heat industry, which will decrease CO2 emissions. But the penetration of carbon-free fuels, such as nuclear power, in Jiangsu is still at the start-up stage. Fig. 5 indicates that the economic structure effect plays a very minor role in decreasing CO2 emissions, which only lead to an accumulated decrease of 2136 10 3 t CO2 emissions during the period 19952009. The general structure of Jiangsu economy is presented in Fig. 10. During the study period the share of the primary industry continuously declined from 16.8% to 6.5% and the share of the tertiary industry increased from 30.5% to 39.5%. The secondary industry has a dominant share and its importance has increased from a share of

52.6% in 1995 to 53.8% in 2009. There is a substitution between the increasing shares of the secondary industry and the tertiary industry and a decreasing share of the primary industry. The Jiangsu Province government has also played a crucial role both in promoting a shift of economic structure toward less energy-intensive services and a shift of product mix toward high value-added products, and in encouraging imports of energy-intensive products. From the above analysis, one can conclude that there is a shift in the Jiangsu economy structure toward the tertiary industry, but the secondary industry still remains in the dominant position. This may be the main reason that the economic structure effect plays a very minor role in decreasing CO2 emissions. Decoupling analysis According to the method presented in the Decoupling index formulation section, the decoupling means breaking the connection between energy-related CO2 emissions and economic performance, as shown in Fig. 11. The variation of decoupling effect suggests a strong connection between CO2 emissions and GDP. The decoupling index is more than 1 for 19961997 and 20002001, which indicates strong decoupling effect. That is, the growth of efforts to reducing CO2 emissions is higher than the increase of economic benet. However, the growth of efforts to reducing CO2 emissions for 20032005 is negative, which represents a re-coupling effect. Weak decoupling is observed in the study period, except for the decoupling index in 19961997, 20002001 and 20032005. Fig. 11 also presents a

Primary 100%

Secondary

Tertiary

80%

60%

40%

20%

0%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Fig. 10. Shares of industries in total economic activity.

Please cite this article as: Wang W, et al, Decomposing the decoupling of energy-related CO2 emissions and economic growth in Jiangsu Province, Energy for Sustainable Development (2012), http://dx.doi.org/10.1016/j.esd.2012.11.007

W. Wang et al. / Energy for Sustainable Development xxx (2012) xxxxxx

1.5

Strong Decoupling
1

Decoupling Index

Weak Decoupling
0.5 0

No Decoupling
-0.5 -1

1995-1996

1996-1997

1997-1998

1998-1999

1999-2000

2000-2001

2001-2002

2002-2003

2003-2004

2004-2005

2005-2006

2006-2007

2007-2008

2008-2009 2007-2008

Fig. 11. Process of decoupling index for the period 19952009.

weak decoupling effect between CO2 emissions and GDP between 1995 and 2009. The above results are consistent with those obtained by Zhang (2000). The decoupling index is dened as the ratio of the sum of energy intensity effect, energy mix effect, economic structure effect, and emission factor to the change of economic activity effect. As shown in Table 3, the economic activity effect makes the continual increase of CO2 emissions over the period 19952009 and the value of this effect gradually increase, which also shows that this effect plays an essential role in the re-coupling process. Fig. 6 also shows an upward trend both in CO2 emissions and GDP over this period. Fig. 12 presents the decoupling index together with the contribution of each single type of effort. Table 3 shows that the energy intensity decreased CO2 emissions in 11 years, which means that energy intensity effect did not decrease enough for decoupling the relation between energy and GDP in Jiangsu Province. The most important change explaining the dissociation achieved refers to the energy intensity effect except for 20032005 and 20072009. The advancement of energy intensity may be due to the use of new process, new technologies and new equipment, which were accompanied by the extensive application of energysaving technologies and the advancement of management level. The economic structure effect does not play an essential role in the decoupling process. As shown in Table 3, the economic structure effect decreased CO2 emissions only in 19951998 and 20052009. Though there is a shift in the Jiangsu economy structure toward the tertiary industry, the secondary industry still remains in the dominant position. This may be the main reason that the economic structure effect plays a very minor role in the decoupling process.

As shown in Table 3, the energy mix effect decreased CO2 emissions only in 7 years. Furthermore, the accumulated (period-wise) effect was a decrease of 45,483 10 3 t, which only accounts for 13.6% of the total CO2 emission change in absolute value. As shown in Fig. 3, fuel switching for terminal use changes toward electricity and heat from coal and its products, which may explain that the energy mix effect plays a positive role in the decoupling process. Though it is relatively small, the emission factor effect plays a positive role in the decoupling process. The emission factor effect caused the continual decrease of CO2 emissions over the period 19952009, as shown in Table 3. The accumulated (period-wise) effect was an increase of 31,443 10 3 t, which accounts for about 9.5% of the total change in absolute value. Thus, the emission factor effect plays an important role in the decoupling process. The main reason may be attributed to the efforts made toward developing large-size, coal-red power plants in the power and heat industry. Policy implications Since sustainable development has become an important topic in the 21st century, the Jiangsu government should not only focus on pursuing economical efciency, but should also enhance energy conservation and environmental quality. According to the results obtained in this paper, the strategic measures for sustainable development should aim at: (1) improving the efciency of energy use, particularly in energy-intensive energy sectors; (2) pushing efcient use of coal through increasing the proportion of raw coal washed; popularizing domestic use of coal briquette; and substituting directly

Economic Structure 1.5

Energy Intensity

Energy Mix

Emission Factor

Decoupling Index

1 0.5 0 -0.5 -1

1995-1996

1996-1997

1997-1998

1998-1999

1999-2000

2000-2001

2001-2002

2002-2003

2003-2004

2004-2005

2005-2006

2006-2007

Fig. 12. Decoupling index and its components for the period 19952009.

Please cite this article as: Wang W, et al, Decomposing the decoupling of energy-related CO2 emissions and economic growth in Jiangsu Province, Energy for Sustainable Development (2012), http://dx.doi.org/10.1016/j.esd.2012.11.007

2008-2009

1995-2009

10

W. Wang et al. / Energy for Sustainable Development xxx (2012) xxxxxx

burning coal by electricity; (3) developing renewable power generation; (4) promoting a shift of economic structure toward less energyintensive services and a shift of product mix toward high value-added products; and (5) encouraging imports of energy-intensive products. We hope that the results of this study would be a helpful reference for setting priority strategies of energy-related CO2 mitigation in Jiangsu Province. Conclusions Nowadays, Jiangsu Province has become one of the most developed regions in China and economic growth in Jiangsu has occurred along with rising CO2 emission levels. It is very necessary to evaluate how energy-related CO2 emissions evolve in Jiangsu Province. The purpose of this paper is to apply the decoupling index combined with the LMDI method to analyze the contribution of the factors which inuenced energy-related CO2 emissions in Jiangsu Province over the period 19952009. The change of CO2 emissions were decomposed into ve factors: the economic activity effect, energy intensity effect, economic structure effect, energy mix effect and emission factor effect. The main conclusions drawn from the present study may be summarized as follows. Along with the rapid economic development, energy consumption rose from 73,489 10 3 tce in 1995 to 239,441 10 3 tce in 2009, representing an annual average growth rate of 8.8%. Accompanying the growth in fossil fuel use, Jiangsu's energy-related CO2 emissions have grown rapidly. Total CO2 emissions in Jiangsu rose from 187,814 10 3 t in 1995 to 520,292 10 3 t in 2009, with an average annual growth rate of about 7.5%. It is apparent that CO2 emissions as a total increased at a rapid pace between 2002 and 2009. Our results show that CO2 emissions in Jiangsu Province were dominated by the secondary industry, which accounts for about 80% of total CO2 emissions. However, coal and its products account for more than 83% of total CO2 emissions, which shows that energy supply in Jiangsu Province mainly depends on coal and its products. This paper also nds that the secondary industry had the highest CO2 emission intensity and the primary industry had the lowest throughout the period. However, the level of CO2 emission intensity for the whole economy was similar with the secondary industry. Economic activity is the critical factor in the growth of energyrelated CO2 emissions in Jiangsu Province. The accumulated effect of economic activity accounts for about 147% of the total change in absolute value. Our results also show that the energy intensity effect plays the dominant role in decreasing CO2 emissions, followed by energy mix effect, emission factor effect and economic structure effect. The accumulated energy intensity effect is a decrease of 76,956 10 3 t, which accounts for about 23% of the total CO2 emissions in absolute value. Though there is a shift in the Jiangsu economy structure toward the tertiary industry, the secondary industry still retains in the dominant position, which may explain why the economic structure effect plays a very minor role in decreasing CO2 emissions. The variation of decoupling effect suggests a strong connection between CO2 emissions and GDP. The period from 2003 to 2005 represents a re-coupling effect, the period 19961997 and 20002001 indicates strong decoupling effect, while the other time interval showed weak decoupling effect. The most important change explaining the achieved dissociation was energy intensity effect. However, the economic activity effect caused the continual increase of CO2 emissions over the period 19952009, which also shows that this effect plays an essential role in the re-coupling process. This paper utilizes the IPCC methodology to estimate the CO2 emissions. However, emission factors given by IPCC include a

minimum and maximum value which provides a range of uncertainty. Only the mean value of emission factor is used in this paper; how to accurately estimate CO2 emissions could be the subject of future research. Furthermore, only ve effect factors are considered in this paper. If a method can study more effect factors, it will be useful to nd how these inuence the changes in energy consumption or CO2 emissions. Then, generalizing the LMDI method which can consider more effect factors could be the subject of another future research. Acknowledgments The authors gratefully acknowledge the nancial support from the Fundamental Research Funds for the Central Universities (2012QNA38). We also would like to thank the anonymous referees for their helpful suggestions and corrections on the earlier draft of our paper, and upon which we have improved the content. References
Ang BW. Decomposition analysis for policymaking in energy: which is the preferred method? Energy Policy 2004;32:11319. CESY (China Energy Statistical Yearbook), 19911996, 19971999, 20002002, 2003, 2004. 2005, 2006, 2007, 2008, 2009, 2010. National Bureau of Statistics of China, National Development and Reform Commission. Chung W, Kam MS, Ip CY. A study of residential energy use in Hong Kong by decomposition analysis, 19902007. Appl Energy 2011;88:51807. Climent F, Pardo A. Decoupling factors on the energyoutput linkage: the Spanish case. Energy Policy 2007;35:5228. Diakoulaki D, Mandaraka M. Decomposition analysis for assessing the progress in decoupling industrial growth from CO2 emissions in the EU manufacturing sector. Energy Econ 2007;29:63664. Enevoldsen MK, Ryelund AV, Andersen MS. Decoupling of industrial energy consumption and CO2-emissions in energy-intensive industries in Scandinavia. Energy Econ 2007;29:66592. Freitas LC, Kaneko S. Decomposing the decoupling of CO2 emissions and economic growth in Brazil. Ecol Econ 2011;70:145969. Gonzlez D, Martnez M. Decomposition analysis of CO2 emissions in the Mexican industrial sector. Energy Sustain Dev 2012;16:20415. IPCC. Greenhouse gas inventory: IPCC guidelines for national greenhouse gas inventories. Bracknell, England: United Kingdom Meteorological Ofce; 2006. JSY. Jiangsu statistical yearbook. Beijing: China Statistical Publishing House; 2011. Li HN, Mu HL, Zhang M, Li N. Analysis on inuence factors of China's CO2 emissions based on PathSTIRPAT model. Energy Policy 2011;39:690611. Lise W. Decomposition of CO2 emissions over 19802003 in Turkey. Energy Policy 2006;34:184152. Liu L. Environmental poverty, a decomposed environmental Kuznets curve, and alternatives: sustainability lessons from China. Ecol Econ 2011;73:8692. Ma C, Stern DI. China's changing energy intensity trend: a decomposition analysis. Energy Econ 2008;30:103753. OECD (Organization for Economic Co-operation and Development). Indicators to measure decoupling of environmental pressure from economic growth. Sustainable Development. SG/SD (2002) 1/Final; 2010 [Website: http://www.olis.oecd.org/ olis/ 2002doc.nsf/ LinkTo/sg-sd (2002) 1-nal accessed on August 28, 2010]. Paul S, Bhattacharya RN. CO2 emissions from energy use in India: a decomposition analysis. Energy Policy 2004;32:58593. Reddy BS, Ray BK. Decomposition of energy consumption and energy intensity in Indian manufacturing industries. Energy Sustain Dev 2010;14:3547. Sheinbaum-Pardo C, Mora-Prez S, Robles-Morales G. Decomposition of energy consumption and CO2 emissions in Mexican manufacturing industries: trends between 1990 and 2008. Energy Sustain Dev 2012;16:5767. Sun JW. Accounting for energy use in China, 198094. Energy 1998;23:83549. Tan ZF, Li L, Wang JJ, Wang JH. Examining the driving forces for improving China's CO2 emission intensity using the decomposing method. Appl Energy 2011;88: 4496504. Zhang ZX. Decoupling China's carbon emissions increase from economic growth: an economic analysis and policy. World Dev 2000;28:73952. Zhang M, Mu HL, Ning YD. Accountingforenergy-relatedCO2 emission in China, 1991 2006. Energy Policy 2009;37:76773. Zhang M, Wang WW. Using an energy ow chart to analyze Jiangsu Province's energy balance. Renew Energy 2012;39:30712. Zhong TY, Huang XJ, Han L, Wang BY. Review on the research of decoupling analysis in the eld of environments and resource. J Nat Resour 2010;25:140012. Zhou P, Ang BW, Han JY. Total factor carbon emission performance: a Malmquist index analysis. Energy Econ 2010;32:194201.

Please cite this article as: Wang W, et al, Decomposing the decoupling of energy-related CO2 emissions and economic growth in Jiangsu Province, Energy for Sustainable Development (2012), http://dx.doi.org/10.1016/j.esd.2012.11.007