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Is CO2 emission intensity comparable?
Energy Policy 28 (2000) 1081}1084
Viewpoint
Is CO emission intensity comparable? J.W. Sun* Turku School of Economics, P.O. Box 110, FIN-20521, Turku, Finland Received 7 July 2000
Abstract This viewpoint demonstrates that CO emission intensity is not comparable if we use current theoretical proofs and the method of empirical analysis. 2000 Elsevier Science Ltd. All rights reserved. Keywords: CO emission intensity; International comparison; Energy use
1. Introduction CO emission intensity is an important index in cur rent energy statistical system. The purpose of establishing an index is to shed light on one of the properties of an observed subject in order to make an analysis of the trend of the observed subject and/or a comparitive analysis of the group that the observed subject belongs to. The aim of this paper is to indicate that CO emission inten sity is not comparable due to its complex formation, and also due the fact that di!erent levels of CO emission intensities in di!erent countries result from di!erent causes. A case analysis which compares the di!erence in CO emission intensity between the 15 EU countries in 1995 is made to support the above point of view.
2. The theoretical proof We demonstrate the conclusion using three di!erent arguments. Firstly, we must have criteria when a comparison in any given group is made. Without exception, the criteria for measuring and comparing CO emission intensity should be: The lower the CO emission intensity is, the better the environmental quality is. That would also indicate a better environmental policy and implemention. If this is true and is generally accepted, then the
* Corresponding author. Tel.: #358-2-338-3532; fax: #358-2-2330755. E-mail address: jsun@abo." (J.W. Sun).
results of this application may not be generally accepted for the following reasons. According to the statistics (IEA, 1999), among the developed countries the lowest CO emission intensity in 1997 was 0.30 u and that occurred in Switzerland. However, CO emission inten sity in 24 out of 98 developing countries was lower than 0.30 u, and the lowest three CO emission intensities were 0.06 u in Myanmar, 0.07 u in Ethiopia, and 0.08 u in Nepal (1 u"1 kg CO /US$ using 1990 prices and PPP, following the same assumptions). However, can we say that environmental quality or environmental policy and implemention in these 24 developing countries was better than in the developed countries? Or that Myanmar, Ethiopia and Nepal had adopted a better CO emission reducing technology than other countries in the world in 1997? Secondly, CO emission intensity is derived from en ergy intensity and their causes. Chauncey indicated that the problem of comparing countries and their respective energy use is a complex one, and simple GDP/= or =/GDP ratio comparisons can lead to wrong conclusions (Chauncey, 1979). This is because CO emission intensity (A)" CO emissons CO emission coe$cient =
;energy intensity
= "C;I. GDP
Thus, the complex question of energy intensity may also in#uence the analysis of CO emission intensity resulting in misleading results.
0301-4215/00/$ - see front matter 2000 Elsevier Science Ltd. All rights reserved. PII: S 0 3 0 1 - 4 2 1 5 ( 0 0 ) 0 0 0 9 8 - 7
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J.W. Sun / Energy Policy 28 (2000) 1081}1084
Thirdly, the factor analysis of CO emission intensity also shows that there are varying factors which cause di!erent levels of CO emission intensity between coun tries. CO emission intensity can be decomposed as E Fossil Fossil = E I ; I; A " ; GDP Fossil Fossil = GDP I I " C ;S1 ;S;I. (1) I I I Eq. (1) indicates that there are four factors that in#uence the level of CO emission intensity: (1) the CO emission coe$cient of fossil fuel use (C "E /Fossil ); I I I (2) the structure of fossil fuel used (S1 "Fossil /Fossil); I I (3) the ratio of fossil fuel used to total energy consumption (S"Fossil/=) and (4) energy intensity (I"=/GDP). These four factors re#ect technical development, the allocation of natural sources, economic structure and the policies regarding energy demand. Obviously, CO emission intensity is determined by the four factors in the above decomposition (it may have other decomposition forms). In any decomposion form, CO emission intensity is not just determined by a single factor. Therefore, the explanation of why CO emission intensities are at di!erent levels in di!erent countries should be analyzed using a solid explanatory base.
3. An empirical analysis: CO2 emission intensity in EU countries, 1995 This analysis will be used to support our conclusion about whether or not CO emission intensity is com parable. The di!erence in the levels of CO emission intensity in 1995 between the 15 EU countries was considerable. The lowest CO emission intensity was 340.35 u, which occurred in France. The CO emission intensity of France is chosen as the reference for the question: Why was the CO emission intensity of other EU countries higher than that of France in 1995? 3.1. The model and the data This study uses the decomposition technique for the factor analysis of the di!erence between observed subjects: A and A (iOj) at time t. G H Eq. (1) is used, and we assume that CO emission intensity in France is chosen as A , CO emission inten sity in other EU countries are chosen A (i"2,2, 15). G *C "C !C , *S1 "S1 !S1 , *S"S !S I G I I I G I I G and *I"I !I , which are the di!erences of C , S1 , S G I I IEA indicated that CO emmissions data referred to IEA publica tion are estimates of CO from fossil fuel combustion, i.e. coal, oil and natural gas only (IEA, 1997).
and I between a speci"ed EU country and France, respectively. Therefore, the di!erence in CO emission intensity between a speci"ed EU country (A ) and France G (A ) can be analyzed as *A"A !A " C ;S1 ;S ;I G G I G I G G I ! C ;S1 ;S ;I I I I " (C #*C );(S1 #*S1 ) I I I I I ;(S #*S) ;(I #*I) ! C ;S1 ;S ;I . (2) I I I According to the complete decomposition model (Sun, 1998), the di!erence in CO emission intensity (*A) between a speci"ed EU country (A ) and France (A ) is G caused by the e!ect of the CO emission coe$cient of fossil fuel used (C ), the e!ect of the structure of fossil fuel used (S1 ), the e!ect of the ratio of fossil fuel used compared to total energy consumption (S ) and the e!ect of energy intensity (I ). The appendix introduces the method in more detail. Therefore, *A"C #S1 #S #I . Table 1 lists the database used by this study. Table 2 shows the decomposition results. 3.2. The results Table 2 reveals that, for example, CO emission inten sity in Austria was 78.44 u higher than that of France in 1995. That was the result of the C which increased 23.61 u, the S1 which decreased 0.27 u, the S which increased 135.43 u and the I decreased 80.32 u. The important discovery is that although CO emis sion intensity in 14 EU countries was higher than that of France in 1995, their causes were di!erent. The dominant reason for their higher CO emission intensity was the S which shows a higher ratio of fossil fuel used when compared to total energy consumption, That occurred in 12 out of the 14 EU countries. In two out of the 14 EU countries it was due to the I indicating that a high er-energy intensity caused the higher CO emission intensity.
4. Discussion and conclusion The study has demonstrated that CO emission inten sity is not comparable. However, two derivative questions occur: Is CO emission intensity unvalued? The
J.W. Sun / Energy Policy 28 (2000) 1081}1084
1083
Table 1 CO emissions from fossil fuel combustion, fossil fuels used, total energy consumption (=) and GDP in EU countries, 1995 CO emissions from (Mt)
Austria Belgium Denmark Finland France Germany Greece Ireland Italy Luxembourg Netherland Portugal Spain Sweden UK
Fossil fuel used (Mtoe)
Coal
Oil
Gas
Coal
Oil
Gas
W
GDP (billion 1990 US$ using PPPs)
12.98 34.94 25.79 24.31 61.79 363.75 34.69 12.15 46.58 2.20 34.90 13.91 76.20 11.28 183.83
32.43 57.91 27.45 23.24 232.56 366.69 41.83 17.65 273.65 5.44 66.31 36.97 153.03 43.26 230.94
14.56 24.28 7.29 6.85 67.67 153.97 0.10 5.06 103.58 1.30 77.62 0.00 17.75 1.58 150.07
3.29 9.10 6.45 6.05 16.06 91.03 8.39 3.13 12.33 0.51 9.19 3.60 19.51 2.79 48.64
11.00 27.05 10.45 9.19 86.56 135.71 17.33 5.67 94.50 1.83 64.12 13.71 57.13 18.29 100.50
6.31 10.61 3.12 2.84 29.57 66.40 0.04 2.33 44.64 0.56 34.08 0.00 7.72 0.68 65.05
26.38 52.38 20.48 28.67 241.32 339.26 23.70 11.46 161.36 3.38 73.29 19.24 103.49 50.66 221.91
143.20 179.37 101.52 79.87 1063.67 1407.28 109.55 53.03 1000.81 11.49 275.19 112.22 506.24 154.44 991.72
Sources: (1) IEA (1997); (2) IEA (1998).
Table 2 The factoral analysis of why the CO emission intensity in a speci"ed EU country was higher than that of France in 1995 (CO emission intensity in France is used for reference) (kg of CO emissions/1 US$ using 1990 price and PPP)
Austria Belgium Denmark Finland Germany Greece Ireland Italy Luxembourg Netherlands Portugal Spain Sweden UK
*A
C
S1
S
I
78.44 312.66 255.89 340.76 288.11 359.06 317.02 83.12 437.72 309.50 113.04 147.53 23.03 229.21
23.61 7.12 30.43 16.87 8.04 44.06 38.17 19.16 48.27 !26.18 !43.85 0.99 5.51 2.43
!0.27 16.92 42.70 50.72 38.41 64.36 27.09 !10.73 15.73 !10.61 52.73 26.74 12.89 15.17
135.43 167.19 238.09 49.56 212.76 275.10 276.00 209.00 235.60 268.34 216.17 163.22 !127.64 217.90
!80.32 121.44 !55.31 223.62 28.91 !24.44 !24.23 !135.20 138.14 77.96 !112.00 !43.41 132.29 !6.28
answer is no. CO emission intensity is a scenario that re#ects the ratio of two outputs of human economic activity: GDP and CO emissions. The analysis of the trend of CO emission intensity is a useful reference point for formulating energy and environmental policies in a nation. The second question is: how can we make international comparisons on the CO emissions issue? CO emission is one of the by-products of economic development. The general economic aim is for more GDP with less CO emissions. An international com parison for CO emissions issue would re#ect how states
are implementing that aim. For realizing this aim, two statistical data are required: the trend of CO emissions and actual CO emissions. The di!erence between them is the result of the improvement or otherwise made to the environmental quality of a state. The statistics for CO emissions concentrate on actual emissions, however, the trend (the theoretical CO emissions) is highly debated with regard to measurement. The point remains though it is time to establish a methodology for measuring the implementation of energy and environmental policy on CO emissions.
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J.W. Sun / Energy Policy 28 (2000) 1081}1084
Appendix A If A can be decomposed into n factors X , and I L A"X . The di!erence between A !A can be estiI G H I mated by the summation of the factors' e!ects, i.e. L L L *A"A !A " X ! X " X . G H G I H I I\ I I I (A.1) This raises the question of estimating the X . If I\ we assume that *X "X !X , *X , is the di!erence I G I H I I of factor k between A and A , Eq. (A.1) becomes G H L L *A"AR !AR " X ! X G H G I H I I I L L " (X #DX )! X H I I H I I I L L X X H I H I L *X # I *X *X " I I I N X X X H I I$N H I H N I L X H I I # *X *X *X #2 I N O X X X I$N$O H I H N H O L # *X . (A.2) I I
According to the principle of `Jointly created and equally distributeda (Sun, 1998), these interaction terms that involve high orders of *X are to be distributed into I relative factors. Thus, L L X X H I H I 1 X "I *X # I *X *X I\ I 2 I N X X X H I I$N H I H N L X H I 1 I # *X *X *X I N O 3 X X X I$N$O H I H N H O L *X I #2# I . n
(A.3)
Hence, Eq. (A.3) leads to an exact decomposition.
References Chauncey, S., 1979. Current Issues in Energy: A Selection of Papers. Pergamon Press, Oxford. IEA, 1997. CO Emissions from Fuel Combustion, 1971}1995: OECD, Paris. IEA, 1998. Energy Balance of OECD Countries, 1995}1996. OECD, Paris. IEA, 1999. CO Emissions from Fuel Combustion, 1971}1997: High lights, OECD, Paris. Sun, J.W., 1998. Changes in energy consumption and energy intensity: a complete decomposition model. Energy Economics 20 (1), 85}100.
Viewpoint
Is CO emission intensity comparable? J.W. Sun* Turku School of Economics, P.O. Box 110, FIN-20521, Turku, Finland Received 7 July 2000
Abstract This viewpoint demonstrates that CO emission intensity is not comparable if we use current theoretical proofs and the method of empirical analysis. 2000 Elsevier Science Ltd. All rights reserved. Keywords: CO emission intensity; International comparison; Energy use
1. Introduction CO emission intensity is an important index in cur rent energy statistical system. The purpose of establishing an index is to shed light on one of the properties of an observed subject in order to make an analysis of the trend of the observed subject and/or a comparitive analysis of the group that the observed subject belongs to. The aim of this paper is to indicate that CO emission inten sity is not comparable due to its complex formation, and also due the fact that di!erent levels of CO emission intensities in di!erent countries result from di!erent causes. A case analysis which compares the di!erence in CO emission intensity between the 15 EU countries in 1995 is made to support the above point of view.
2. The theoretical proof We demonstrate the conclusion using three di!erent arguments. Firstly, we must have criteria when a comparison in any given group is made. Without exception, the criteria for measuring and comparing CO emission intensity should be: The lower the CO emission intensity is, the better the environmental quality is. That would also indicate a better environmental policy and implemention. If this is true and is generally accepted, then the
* Corresponding author. Tel.: #358-2-338-3532; fax: #358-2-2330755. E-mail address: jsun@abo." (J.W. Sun).
results of this application may not be generally accepted for the following reasons. According to the statistics (IEA, 1999), among the developed countries the lowest CO emission intensity in 1997 was 0.30 u and that occurred in Switzerland. However, CO emission inten sity in 24 out of 98 developing countries was lower than 0.30 u, and the lowest three CO emission intensities were 0.06 u in Myanmar, 0.07 u in Ethiopia, and 0.08 u in Nepal (1 u"1 kg CO /US$ using 1990 prices and PPP, following the same assumptions). However, can we say that environmental quality or environmental policy and implemention in these 24 developing countries was better than in the developed countries? Or that Myanmar, Ethiopia and Nepal had adopted a better CO emission reducing technology than other countries in the world in 1997? Secondly, CO emission intensity is derived from en ergy intensity and their causes. Chauncey indicated that the problem of comparing countries and their respective energy use is a complex one, and simple GDP/= or =/GDP ratio comparisons can lead to wrong conclusions (Chauncey, 1979). This is because CO emission intensity (A)" CO emissons CO emission coe$cient =
;energy intensity
= "C;I. GDP
Thus, the complex question of energy intensity may also in#uence the analysis of CO emission intensity resulting in misleading results.
0301-4215/00/$ - see front matter 2000 Elsevier Science Ltd. All rights reserved. PII: S 0 3 0 1 - 4 2 1 5 ( 0 0 ) 0 0 0 9 8 - 7
1082
J.W. Sun / Energy Policy 28 (2000) 1081}1084
Thirdly, the factor analysis of CO emission intensity also shows that there are varying factors which cause di!erent levels of CO emission intensity between coun tries. CO emission intensity can be decomposed as E Fossil Fossil = E I ; I; A " ; GDP Fossil Fossil = GDP I I " C ;S1 ;S;I. (1) I I I Eq. (1) indicates that there are four factors that in#uence the level of CO emission intensity: (1) the CO emission coe$cient of fossil fuel use (C "E /Fossil ); I I I (2) the structure of fossil fuel used (S1 "Fossil /Fossil); I I (3) the ratio of fossil fuel used to total energy consumption (S"Fossil/=) and (4) energy intensity (I"=/GDP). These four factors re#ect technical development, the allocation of natural sources, economic structure and the policies regarding energy demand. Obviously, CO emission intensity is determined by the four factors in the above decomposition (it may have other decomposition forms). In any decomposion form, CO emission intensity is not just determined by a single factor. Therefore, the explanation of why CO emission intensities are at di!erent levels in di!erent countries should be analyzed using a solid explanatory base.
3. An empirical analysis: CO2 emission intensity in EU countries, 1995 This analysis will be used to support our conclusion about whether or not CO emission intensity is com parable. The di!erence in the levels of CO emission intensity in 1995 between the 15 EU countries was considerable. The lowest CO emission intensity was 340.35 u, which occurred in France. The CO emission intensity of France is chosen as the reference for the question: Why was the CO emission intensity of other EU countries higher than that of France in 1995? 3.1. The model and the data This study uses the decomposition technique for the factor analysis of the di!erence between observed subjects: A and A (iOj) at time t. G H Eq. (1) is used, and we assume that CO emission intensity in France is chosen as A , CO emission inten sity in other EU countries are chosen A (i"2,2, 15). G *C "C !C , *S1 "S1 !S1 , *S"S !S I G I I I G I I G and *I"I !I , which are the di!erences of C , S1 , S G I I IEA indicated that CO emmissions data referred to IEA publica tion are estimates of CO from fossil fuel combustion, i.e. coal, oil and natural gas only (IEA, 1997).
and I between a speci"ed EU country and France, respectively. Therefore, the di!erence in CO emission intensity between a speci"ed EU country (A ) and France G (A ) can be analyzed as *A"A !A " C ;S1 ;S ;I G G I G I G G I ! C ;S1 ;S ;I I I I " (C #*C );(S1 #*S1 ) I I I I I ;(S #*S) ;(I #*I) ! C ;S1 ;S ;I . (2) I I I According to the complete decomposition model (Sun, 1998), the di!erence in CO emission intensity (*A) between a speci"ed EU country (A ) and France (A ) is G caused by the e!ect of the CO emission coe$cient of fossil fuel used (C ), the e!ect of the structure of fossil fuel used (S1 ), the e!ect of the ratio of fossil fuel used compared to total energy consumption (S ) and the e!ect of energy intensity (I ). The appendix introduces the method in more detail. Therefore, *A"C #S1 #S #I . Table 1 lists the database used by this study. Table 2 shows the decomposition results. 3.2. The results Table 2 reveals that, for example, CO emission inten sity in Austria was 78.44 u higher than that of France in 1995. That was the result of the C which increased 23.61 u, the S1 which decreased 0.27 u, the S which increased 135.43 u and the I decreased 80.32 u. The important discovery is that although CO emis sion intensity in 14 EU countries was higher than that of France in 1995, their causes were di!erent. The dominant reason for their higher CO emission intensity was the S which shows a higher ratio of fossil fuel used when compared to total energy consumption, That occurred in 12 out of the 14 EU countries. In two out of the 14 EU countries it was due to the I indicating that a high er-energy intensity caused the higher CO emission intensity.
4. Discussion and conclusion The study has demonstrated that CO emission inten sity is not comparable. However, two derivative questions occur: Is CO emission intensity unvalued? The
J.W. Sun / Energy Policy 28 (2000) 1081}1084
1083
Table 1 CO emissions from fossil fuel combustion, fossil fuels used, total energy consumption (=) and GDP in EU countries, 1995 CO emissions from (Mt)
Austria Belgium Denmark Finland France Germany Greece Ireland Italy Luxembourg Netherland Portugal Spain Sweden UK
Fossil fuel used (Mtoe)
Coal
Oil
Gas
Coal
Oil
Gas
W
GDP (billion 1990 US$ using PPPs)
12.98 34.94 25.79 24.31 61.79 363.75 34.69 12.15 46.58 2.20 34.90 13.91 76.20 11.28 183.83
32.43 57.91 27.45 23.24 232.56 366.69 41.83 17.65 273.65 5.44 66.31 36.97 153.03 43.26 230.94
14.56 24.28 7.29 6.85 67.67 153.97 0.10 5.06 103.58 1.30 77.62 0.00 17.75 1.58 150.07
3.29 9.10 6.45 6.05 16.06 91.03 8.39 3.13 12.33 0.51 9.19 3.60 19.51 2.79 48.64
11.00 27.05 10.45 9.19 86.56 135.71 17.33 5.67 94.50 1.83 64.12 13.71 57.13 18.29 100.50
6.31 10.61 3.12 2.84 29.57 66.40 0.04 2.33 44.64 0.56 34.08 0.00 7.72 0.68 65.05
26.38 52.38 20.48 28.67 241.32 339.26 23.70 11.46 161.36 3.38 73.29 19.24 103.49 50.66 221.91
143.20 179.37 101.52 79.87 1063.67 1407.28 109.55 53.03 1000.81 11.49 275.19 112.22 506.24 154.44 991.72
Sources: (1) IEA (1997); (2) IEA (1998).
Table 2 The factoral analysis of why the CO emission intensity in a speci"ed EU country was higher than that of France in 1995 (CO emission intensity in France is used for reference) (kg of CO emissions/1 US$ using 1990 price and PPP)
Austria Belgium Denmark Finland Germany Greece Ireland Italy Luxembourg Netherlands Portugal Spain Sweden UK
*A
C
S1
S
I
78.44 312.66 255.89 340.76 288.11 359.06 317.02 83.12 437.72 309.50 113.04 147.53 23.03 229.21
23.61 7.12 30.43 16.87 8.04 44.06 38.17 19.16 48.27 !26.18 !43.85 0.99 5.51 2.43
!0.27 16.92 42.70 50.72 38.41 64.36 27.09 !10.73 15.73 !10.61 52.73 26.74 12.89 15.17
135.43 167.19 238.09 49.56 212.76 275.10 276.00 209.00 235.60 268.34 216.17 163.22 !127.64 217.90
!80.32 121.44 !55.31 223.62 28.91 !24.44 !24.23 !135.20 138.14 77.96 !112.00 !43.41 132.29 !6.28
answer is no. CO emission intensity is a scenario that re#ects the ratio of two outputs of human economic activity: GDP and CO emissions. The analysis of the trend of CO emission intensity is a useful reference point for formulating energy and environmental policies in a nation. The second question is: how can we make international comparisons on the CO emissions issue? CO emission is one of the by-products of economic development. The general economic aim is for more GDP with less CO emissions. An international com parison for CO emissions issue would re#ect how states
are implementing that aim. For realizing this aim, two statistical data are required: the trend of CO emissions and actual CO emissions. The di!erence between them is the result of the improvement or otherwise made to the environmental quality of a state. The statistics for CO emissions concentrate on actual emissions, however, the trend (the theoretical CO emissions) is highly debated with regard to measurement. The point remains though it is time to establish a methodology for measuring the implementation of energy and environmental policy on CO emissions.
1084
J.W. Sun / Energy Policy 28 (2000) 1081}1084
Appendix A If A can be decomposed into n factors X , and I L A"X . The di!erence between A !A can be estiI G H I mated by the summation of the factors' e!ects, i.e. L L L *A"A !A " X ! X " X . G H G I H I I\ I I I (A.1) This raises the question of estimating the X . If I\ we assume that *X "X !X , *X , is the di!erence I G I H I I of factor k between A and A , Eq. (A.1) becomes G H L L *A"AR !AR " X ! X G H G I H I I I L L " (X #DX )! X H I I H I I I L L X X H I H I L *X # I *X *X " I I I N X X X H I I$N H I H N I L X H I I # *X *X *X #2 I N O X X X I$N$O H I H N H O L # *X . (A.2) I I
According to the principle of `Jointly created and equally distributeda (Sun, 1998), these interaction terms that involve high orders of *X are to be distributed into I relative factors. Thus, L L X X H I H I 1 X "I *X # I *X *X I\ I 2 I N X X X H I I$N H I H N L X H I 1 I # *X *X *X I N O 3 X X X I$N$O H I H N H O L *X I #2# I . n
(A.3)
Hence, Eq. (A.3) leads to an exact decomposition.
References Chauncey, S., 1979. Current Issues in Energy: A Selection of Papers. Pergamon Press, Oxford. IEA, 1997. CO Emissions from Fuel Combustion, 1971}1995: OECD, Paris. IEA, 1998. Energy Balance of OECD Countries, 1995}1996. OECD, Paris. IEA, 1999. CO Emissions from Fuel Combustion, 1971}1997: High lights, OECD, Paris. Sun, J.W., 1998. Changes in energy consumption and energy intensity: a complete decomposition model. Energy Economics 20 (1), 85}100.