Industrial CO₂ emissions from energy use in Korea: A structural decomposition analysis

This paper attempts to quantify energy consumption and CO₂ emissions in the industrial sectors of Korea. The sources of the changes in CO₂ emissions for the years 1990-2003 are investigated, in terms of a total of eight factors, through input-output structural decomposition analysis: changes in emission coefficient (caused by shifts in energy intensity and carbon intensity); changes in economic growth; and structural changes (in terms of shifts in domestic final demand, exports, imports of final and intermediate goods, and production technology). The results show that the rate of growth of industrial CO₂ emissions has drastically decreased since the 1998 financial crisis in Korea. The effect on emission reductions due to changes in energy intensity and domestic final demand surged in the second period (1995-2000), while the impact of exports steeply rose in the third period (2000-2003). Of all the individual factors, economic growth accounted for the largest increase in CO₂ emissions. The results of this analysis can be used to infer the potential for emission-reduction in Korea.