Driving forces of CO2 emissions and energy intensity in Colombia

Abstract

We analyze the driving factors of CO2 emissions generation and energy intensity during almost four decades. We apply a factorial decomposition for CO2 emissions, starting from the Kaya identity, using the logarithmic mean Divisia index method. The results indicate that the increase in emissions is mainly explained by the affluence effect and the population effect, but is partially offset by the effect of energy intensity and, to a lesser extent, the carbonization effect. We then analyze the driving factors of energy intensity. With this objective, we first transform final energy into its total primary energy requirements. We find that the decrease in total energy intensity is mainly due to the reduction in sectoral energy intensity and, to a lesser extent, to structural change. The most important contribution to the reduction in sectoral energy intensity is explained by efficiency improvement in the transport sector, but also by industry, while the decrease in the share of industry would be the most relevant component explaining the reduction of the structural change effect. This is the first application of this type to the Colombian case and provides useful information for the analysis and design of energy and environmental policies