Driving factors of energy-relevant CO₂ emissions in China’s fixed asset investment: A decomposition analysis

The purpose of this paper is to use an index decomposition analysis to investigate the driving forces of China’s CO₂ emissions related to fixed asset investments from 2003 to 2015.

This paper uses an index decomposition analysis to investigate the driving forces of China’s CO₂ emissions related to fixed asset investments from 2003 to 2015. To make policy recommendations, this paper identifies three effects. An approach to calculating energy-relevant CO₂ emissions is also presented.

The results suggest that the amount of CO₂ emissions related to fixed asset investments increased during the entire period. The social and economic effect played a major role in promoting carbon emissions, followed by the fixed asset effect. Therefore, the activity factor was the dominant positive factor, followed by the construction factor. The negative element was the energy effect, in which the energy intensity factor played an important role in reducing emissions, followed by the structural factor. Moreover, the carbon intensity factor might be a potential inhibitory force in reducing carbon emissions.

A steady financial policy, relaxed family planning, sustainable urbanization, strategy of innovation-driven development, reform of scientific and technological structures, development of science and technology and exploration of new energy sources are proposed to mitigate carbon emissions from fixed asset investments. The conclusion also provides a reference for developing countries in similar situations.

This paper uses an index decomposition analysis to investigate the driving forces of China’s CO₂ emissions related to fixed asset investments from 2003 to 2015. To make policy recommendations, this paper identifies three effects. An approach to calculating energy-relevant CO₂ emissions is also presented.