CO2 Emission and Energy Consumption from Automobile Industry in China: Decomposition and Analyses of Driving Forces

Abstract

Despite the increasing contribution of the automotive industry to China’s national economy, CO2 emissions have become a challenge. However, the research about its energy consumption and carbon emissions is lacking. The significance of this study is to fill the research gap and provide suggestions for China’s automotive industry to reduce its carbon emissions. In this paper, the extended logarithmic Division index (LMDI) method is adopted to decompose the factors affecting carbon emissions and determine the key driving forces. According to provincial statistical data in China in 2017, the annual emissions of six provinces exceeded five million tons, accounting for 55.44% of the total emissions in China. The largest source of emissions in China is in Jilin Province, followed by Jiangsu, Shandong, Shanghai, Hubei and Henan. The decomposition results show that investment intensity effect is the greatest factor for CO2 emissions, while R&D intensity and energy intensity are the two principal factors for emission reduction. After the identification of driving factors, mitigation measures are proposed considering the current state of affairs and real situation, including improving energy structure, accelerating product structure transformation, stimulating sound R&D investment activities, promoting energy conservation and new energy automobile industry development and boosting industrial cluster development.