Key factors affecting greenhouse gas emissions in the Canadian industrial sector: A decomposition analysis

Abstract The industrial sector, accounting for 30% of global greenhouse gas (GHG) emissions, is among the key drivers of human-induced climate change impacts. Given this volume of emissions, the sector could play a critical role in mitigating climate change. Canada is among the top 10 global GHG emitters and its industrial sector is responsible for more than 39% of national emissions. GHG emissions from the sector increased by almost 32% between 1990 and 2017 and are expected to almost double by 2050 if no measures are taken. This paper aims to evaluate how different technical and economic factors have contributed to the increasing GHG emissions trends in Canada’s industrial sector between 1990 and 2014. The logarithmic mean Divisia index was developed and implemented as the decomposition method. Results from the analysis suggest that activity level is the biggest contributor to the increase in industrial GHG emissions between 1990 and 2014, which ranged from 5 MTCO2eq in 1994 to 57 MTCO2eq in 2014 compared to the 1990 baseline.