Uncovering the driving forces of carbon dioxide emissions in Chinese manufacturing industry: An intersectoral analysis

As the pillar of national economy, manufacturing industry is the largest primary energy consumer and emitter of carbon dioxide (CO2) in China. Therefore, capturing the determinants of CO2 emissions in manufacturing industry is extremely important for national efforts to mitigate carbon emissions. This paper explores the major driving forces behind CO2 emission changes in China's manufacturing industry during 2000-2015 from perspectives of the whole sector and 28 subsectors, by applying the temporal logarithmic mean Divisia index (LMDI) method. Moreover, an intersectoral LMDI model is built to uncover the intersectoral discrepancies of CO2 emissions among 28 subsectors. The temporal analysis indicates that industrial activity and energy intensity are crucial factors respectively contributing to the increase and mitigation of CO2 emissions. The intersectoral analysis reveals that energy intensity is the dominant factor responsible for the intersectoral discrepancies of CO2 emissions among 28 subsectors. The great mitigation towards CO2 emissions can be achieved if energy efficiency is largely improved in carbon-intensive subsectors. Priority should be given by governments to the industrial technology advancement, such as subsidies for energy-saving technological transformation and promotion of international advanced techniques and equipment, which can greatly improve production efficiency and mitigate emissions in manufacturing industry.