Decoupling economic growth from carbon dioxide emissions: A decomposition analysis of Italian energy consumption

Decomposition analysis is used to assess the progress in decoupling Italian economic growth from CO₂ emissions. Using the method developed by Sun JW. Accounting for energy use in China, 1980-94. Energy 1998;23:835-49, the main factors that influence the changes in energy-related CO₂ emissions are analysed. The study refers to the period 1998-2006, split into two time intervals (1998-2002 and 2002-2006) and considers four explanatory factors: CO₂ intensity, energy intensity, structural changes and economic activity. The importance of sectoral dimension is taken into account by dividing the Italian economy into five main sectors: the agricultural; the industrial; the electricity and heat production, water and gas; the transport and the services sectors. An industrial sub-sector decomposition analysis is also performed by considering six industrial branches. It is found that, during the period considered, the Italian economy did not perform absolute decoupling in terms of energy consumption and carbon dioxide emissions and that economic growth and energy intensity are the largest contributors to CO₂ emissions increase.