Energy and CO2 intensity changes in the EU-27: Decomposition into explanatory effects

Abstract

Sustainability has traditionally focused on three interconnected and mutually enforcing pillars: economy, ecology and society. One of today’s major challenges is to tune environmental sustainability with economic growth and welfare by decoupling resources use and environmental degradation from economic growth. This work aims to assess energy-economy-environment interactions, analyzing energy and CO2 emission intensity. This is done through a comparative examination of their recent trends in the EU-27 countries, from 1999 to 2009, both by assessing resource and impact decoupling, and through the decomposition of the overall rates of change into their main explanatory effects. One of this work’s major contributions is the derivation of policy implications from the assessment of the main driving forces behind energy and CO2 intensity, with a greater geographical and temporal focus than prior studies. The results show that, overall, the EU-27 economies reduced total energy use by moving into less energy-intensive structures and improving sectoral energy efficiency, in spite of the adverse results of the activity effect. Regarding CO2 emissions, the EU-27 decreased these by moving to less carbon-intensive structures and by improving the sectoral energy efficiency, the energy-mix and the emission-factor.