The Drivers of GHG Emissions Intensity Improvements in Major EconomiesAnalysis of Trends 1995-2009

This paper analyzes the trends in GHG emissions intensity over the period 1995-2009, in a mix of developing and developed economies that account for constitute almost 2/3rd of global emissions. In doing so it distinguishes between the demand-based emissions (DBEs) and production-based emissions (PBEs). Several studies find that while PBEs in the developed economies during the period have been stabilized, the DBEs are on the rise. Understanding the relative influence of various factors that has shaped the differential patterns of emissions growth will provide us with important policy insights for controlling GHG emissions. It undertakes a decomposition exercise to understand the changes in both PBEs and DBEs intensities due to changes in technological change and structural shifts in production and final consumption. Main findings of the paper are that technology change has been the key driver of emissions intensity improvements in production and consumption. Intensity improvements in production activities has been more than those in consumption. Structural changes in composition of production and demand has relatively smaller contribution in overall intensity improvement. Structural shifts have somewhat negatively contributed to emissions intensity improvements in Canada and China. In India structural shift in both production and consumption activities have contributed significantly in emissions intensity improvements. Changes in regional composition of final consumptions have worked against emissions intensity improvements particularly in developed economies of Canada, EU 27 and United States.