Creating a decarbonized economy: Decoupling effects and driving factors of CO2 emission of 28 industries in China

Identifying the carbon emission characteristics, driving factors, and decoupling status of the industrial subsectors is important for developing effective policy measures. This allows for implementing industrial emission reduction that, eventually, decouple carbon emission and economic growth. Such an analysis is especially important for the case of China on its way towards sustainable development and increasing global interrelationships. However, the literature still lacks comprehensive analysis, especially, at the industry level. This study uses the Logarithmic Mean Divisia Index and decoupling indicator to analyze how different factors contribute to CO2 emissions in 28 industries in China during 2002-2017. The results reveal that the growth of industrial CO2 emissions has been positive but decreasing. The highest CO2 emission change is observed for production and supply of electric and heat power, processing of petroleum, coking, and nuclear fuel, and smelting and pressing of metals. These sectors also show high carbon intensity levels. The economic output (scale) effect and population effect comprise the two major factors promoting the CO2 emission. The energy intensity effect is the key inhibiting factor of the industrial energy-related CO2 emission in China. The suppressive effects of energy and industrial structure have been continuously increasing. The economic growth and CO2 emission has been gradually decoupling in the case of the 28 sectors analyzed. Manufacture of cloths, leather, fur, feather, and related products as well as production and supply of gas exhibit a relatively stable strong decoupling. Based on the decoupling analysis, this study shows that energy intensity has induced the decoupling, whereas the opposite effect has occurred due to economic growth, and the other factors showed little effect on CO2 emission decoupling.