Trend Changes and the Driving Forces of Environmental Indicators in Countries Worldwide: A Structural Change Analysis of Variations in CO2 Emissions and Eco-Efficiency

Abstract

Many authors state that climate change is driven by increasing CO2 emissions worldwide. An understanding of the major driving forces affecting emissions over time in both developed and developing countries is important. Thus, in this study, structural break analysis is used to identify when the trends of environmental indicators—CO2 emissions and environmental efficiency (EE)—across countries worldwide change. Our findings revealed notable structural breaks occurring in countries in 1994, coinciding with ballooning fossil energy prices. Regarding CO2, 55 of 143 countries experienced a structural break. Furthermore, another wave of structural breaks emerged in 2014, corresponding to the implementation of CO2 emission reduction plans by certain nations. For CO2, 64 of 143 countries experienced a structural break. Upon detecting breakpoints and their trends, we utilized LMDI factor decomposition analysis to discern their driving factors, thereby elucidating the underlying dynamics. In Latin America and the Caribbean, most breakpoints were undesirable shifts, but recently, desirable shifts have increased in North America, Oceania, and Europe, which include many countries with high economic levels, improving energy-related factors. Sub-Saharan Africa can also be said to have undergone an undesirable shift regarding energy-related factors. This study clarifies the precise influences on the trend of CO2 emissions at the global level by identifying the point in time when there is a significant statistical, rather than a subjective, breakpoint.