A multiplicative log mean Divisia index decomposition analysis of energy‐related carbon emissions in Pakistan: From the perspective of economic development phases

Abstract

To successfully implement mitigation policies, it is first needed to identify the factors that contribute to carbon emissions. Based on the extended Kaya identity approach, this study investigates the driving factors of energy‐related carbon emissions in Pakistan from 1990 to 2019 using the multiplicative LMDI‐I decomposition technique with no residual term. The decomposition results reveal that the population and affluence contributed significantly to accelerating carbon emissions from energy consumption across all the sub‐periods. The cumulative effect of population size increased to 2.286 times in 2019, far greater than the impact of other factors. The cumulative effect of economic activity per person reached 1.566 in 2019. The impact of fuel quality and energy intensity is relatively minor (as the index value is less than one) most of the time. The cumulative effect of renewable energy penetration has increased from 0.998 in 1990 to 1.034 in 2019 due to the country's less mature renewable energy technologies. Fossil fuel switching is a factor that reduces carbon emissions, as the index value decreased from 0.945 in 1990 to 0.918 in 2019. The results of the study contain helpful information for lowering carbon emissions.