A spatial-temporal decomposition of carbon emission intensity: a sectoral level analysis in Pakistan

Abstract

We examine the relative performance of the industry, services, and agriculture sectors in energy conservation and reduction in CO₂ emissions in Pakistan using the “spatial-temporal decomposition” method by taken data from 2006 to 2016. An efficient way to achieve low-carbon economy targets is to decompose different factors contributing to CO₂ emissions, including structure effect, intensity effect, GDP gap effect, energy use efficiency effect, and economic efficiency. We classify economic sectors into three groups based on performance, i.e., sectors performing below, average, and above-average performing. Our results indicate that the economic efficiency and energy use efficiency effects in the industry sector have remained above average. In contrast, the GDP gap effect has remained below average. In the case of structure effect and intensity effect, the agriculture sector has performed on average. In contrast, the service sector has shown mixed results in all factors. The government should pay special attention to energy use structure and innovation to improve desirable output technical efficiency to achieve the target carbon emission level.