power sector of selected countries in Asia and the Pacific

Factors affecting CO 2emission from the power sector of selected countries in Asia and the Paci?c

Ram M.Shrestha ?,Gabrial Anandarajah,Migara H.Liyanage

Asian Institute of Technology,School of Environment,Resources and Development,PO Box 4,Klong Luang,Pathumthani 12120,Thailand

a r t i c l e i n f o

Article history:

Received 24January 2008Accepted 27January 2009

Available online 21March 2009Keywords:

Power sector in Asia and the Paci?c Factors affecting CO 2emission Divisia decomposition

a b s t r a c t

This study analyzes the key factors behind the CO 2emissions from the power sector in ?fteen selected countries in Asia and the Paci?c using the Log-Mean Divisia Index method of decomposition.The roles of changes in economic output,electricity intensity of the economy,fuel intensity of power generation and generation structure are examined in the evolution of CO 2emission from the power sector of the selected countries during 1980–2004.The study shows that the economic growth was the dominant factor behind the increase in CO 2emission in ten of the selected countries (i.e.,Australia,China,India,Japan,Malaysia,Pakistan,South Korea,Singapore,Thailand and Vietnam,while the increasing electricity intensity of the economy was the main factor in three countries (Bangladesh,Indonesia and Philippines).Structural changes in power generation were found to be the main contributor to changes in the CO 2emission in the case of Sri Lanka and New Zealand.

1.Introduction

Global warming and mitigation of greenhouse gases (GHGs)are presently the major issues of international concern.The power sector is a major source of CO 2emission and accounts for about 36%of the total CO 2emission in the world and 45%in Asia in 2004(IEA,2006a ).The power sector CO 2emission has been growing at the average annual rate of 8.6%during 1990–2004in Asia as a whole,while the growth rate at the global level was only 3.5%during the period.The potential factors contributing to the changes in CO 2emissions from the power sector are changes in electricity generation requirement,structure of power generation (i.e.,the shares of different types of fuels/energy resources in power generation),fuel intensities of power generation (i.e.,electricity generation ef?ciency),and fuel quality (carbon content of fuels).Growth in electricity generation requirement is directly associated with the growth in electricity demand,which,in turn,is mainly affected by economic growth and electricity intensity of the economy (de?ned as electricity use per unit of gross domestic product (GDP)).

There are only a few studies on decomposition of factors behind changes in CO 2emission intensity of the power sector in Asia–Paci?c countries (e.g.,Shrestha and Timilsina,1996).Simi-larly,their exist only a limited number of studies on factors behind changes in the power sector’s CO 2emission (Ang et al.,1998;Ang and Choi,2002).Shrestha and Timilsina (1996)analyzed the

effects of changes in fuel intensity and generation structure on CO 2emissions intensities in the electricity sector in selected Asian countries using the Divisia Index approach.Ang et al.(1998)assessed the effects of changes in electricity production level,CO 2emission coef?cients of fuels,electricity generation structure and fuel intensity of electricity generation on CO 2emission from the electricity sector in South Korea using the Log-Mean Divisia Index methodology.However,they did not consider the effect of changes in electricity intensity of the economy.Ang and Choi (2002)presented the decomposition of CO 2emissions from electricity generation in South Korea including nuclear and hydropower plants.To the knowledge of the authors,no study so far,discusses the effects of economic growth (i.e.,changes in economic output)and changes in electricity intensity,fuel intensity (de?ned as energy consumption per unit of electricity generation)and generation structure (i.e.,the effect due to the change in fuel-mix in electricity generation)on CO 2emissions from the power sector in a comprehensive manner.

In this study,we ?rst analyze the factors behind the historical evolution of CO 2emission from the power sector during 1980–2004in the case of ?fteen countries of Asia and the Paci?c (i.e.,Australia,Bangladesh,China,India,Indonesia,Japan,Malay-sia,New Zealand,Pakistan,Philippines,Singapore,South Korea,Sri Lanka,Thailand and Vietnam).In particular,we analyze the relative contributions of economic growth and changes in (i)electricity intensity,(ii)energy mix in power generation and (iii)ef?ciency of power generation technologies to the power sector CO 2emissions during 1980–2004.Given that the electricity sector reform/restructuring started in most of the Asian countries in early 1990s and some of them were severely affected by the

Contents lists available at ScienceDirect

journal homepage:https://www.360docs.net/doc/f29898301.html,/locate/enpol

Energy Policy

?Corresponding author.Fax:+6625245439.

E-mail address:ram@ait.ac.th (R.M.Shrestha).

Energy Policy 37(2009)2375–2384

economic crisis of 1997,we further analyze the changes in the power sector CO 2emission in three different sub-periods,i.e.,1980–1989,1990–1997and 1998–2004.

The paper is organized as follows:Section 2discusses the characteristics of the electricity generation along with the CO 2emission from the power sector and electricity intensity of the economy during 1980–2004.Section 3presents the decomposi-tion methodology used in this study and data sources.This is followed by a discussion of the results of factor decomposition analysis in Section 4.Some major policy implications of the study are discussed in Section 5and key ?ndings of the study are summarized in the ?nal section.

2.Electricity generation,CO 2emission and electricity intensity in the selected Asia–Paci?c countries

The average annual growth rate (AAGR)of electricity genera-tion varied widely during 1980–2004across the selected countries,i.e.,from 2.5%in New Zealand to 12.0%in Indonesia,while the economic growth rate during the period varied from 2.4%in Japan to 9.8%in China and the CO 2emission growth rate was in the range of 2.2%in Japan to 22.6%in Sri Lanka.Table 1presents the average annual growth rates of the power sector CO 2emission,GDP and electricity generation of the countries for the three sub-periods:1980–1989,1990–1997and 1998–2004.Inter-estingly,the growth rates of CO 2emission from power generation in the selected countries do not strictly follow the growth pattern of electricity generation.One of the reasons behind this was the changing power generation structure in the countries,i.e.:(i)shifts from thermal to non-thermal power generation or vice

versa (mainly in Bangladesh,India,New Zealand,Pakistan,South Korea and Sri Lanka),

(ii)shifts from more carbon to less carbon intensive power

generation,e.g.,from coal or oil to natural gas based power generation (e.g.,in Bangladesh,Japan,Indonesia,Malaysia,Singapore,South Korea,Thailand and Vietnam)and

(iii)shifts from low carbon to high carbon intensive power

generation, e.g.,from oil to coal-based power generation (e.g.,China,India,Indonesia,Japan,New Zealand,Philippines and South Korea).Table 2presents the share of the power sector in total CO 2emission in 1990,1995and 2004in the selected countries under

this study.In all the countries (except Japan,South Korea and Thailand),the share of the power sector in CO 2emission was increasing during 1990–2004.The sector contributed to more than half of the total CO 2emissions in Australia,China,India and Singapore in 2004.

Table 3presents the share of thermal power plants in electricity generation in selected years.Note that the share of thermal power generation had increased substantially in the selected countries except China,Japan,Philippines,Singapore and Vietnam during 1980–2004.The share increased from 58%to 82%in India and from 36%to 67%in Pakistan during the period.The share of thermal generation was over 80%in eight of the countries under the study,i.e.,Australia,Bangladesh,China,India,Indonesia,Malaysia,Singapore and Thailand in 2004.

The structure of power generation by fuel type and electricity generation ef?ciency in the selected countries in 1980and 2004are presented in Table 4.The overall ef?ciency of electricity generation based on coal,oil and gas had increased in most countries during 1980–2004.Among the fossil fuels used for power generation,coal continued to dominate in Australia,China and India,while natural gas remained dominant in Bangladesh,New Zealand and Pakistan.Among the countries under the study,thermal power generation was entirely based on oil only in Sri Lanka.

Table 1

AAGR of GDP,power generation and CO 2emission in the selected countries during 1980–2004(%).Country

Power sector CO 2emission

GDP

Total power generation

Thermal power generation

1980–19891990–19971998–20041980–19891990–19971998–20041980–19891990–19971998–20041980–19891990–19971998–2004

Australia 4 2.9

3.1 3.5

4.0 4.2 4.9 2.7 4.5

5.4 2.7 4.7Bangladesh 11.6 4.115.6 3.5 4.37.313.2 5.413.315.2

6.213.7China

7.39.119.49.811.313.47.9

8.917.97.98.918.2India 10.58.57.0 5.7 4.98.3

9.1 6.9 4.611.88.5 5.5Indonesia 15.31116.5 6.27.4 5.317.311.610.914.213.912.9Japan 2.4à0.0 4.7 3.9 1.7 1.3 4.0 2.4 1.2 3.00.1 4.2Malaysia 4.412.79.6 5.68.57.37.914.47.2 5.716.57.4New Zealand 11.77.812.1 2.0 3.2 5.2 2.4 1.4 3.316.1 6.17.4Pakistan 12.29.6 5.6 5.2 4.5 5.411.47.5 6.211.811.9 6.8Philippines 110.3 3.1 1.7 3.1 5.6 4.2 6.49.2 1.78.910.4Singapore 7.9 6.7à2.07.28 6.18.27.6 5.58.27.6 5.5South Korea 526.315.99.09.08.510.914.313.1 4.328.417.1Sri Lanka 86767542.0 4.5 5.3 5.3 6.37.48.380279637.5Thailand 8.210.2 3.18.27.2 6.81110.6 5.810.611.1 6.0Vietnam 6.5

à8

18.4

5.5

8.2

9.6

8.6

23.3

5.1

à1.5

36.4

Source :IEA (2006a,2006b and 2006c).

Table 2

Share of the power sector in total CO 2emission (%).Country 199019952004Australia 474754Bangladesh 333340China 253355India

394751Indonesia 161628Japan 333331Malaysia

262831New Zealand 131020Pakistan 252729Philippines 272435Singapore 403550South Korea 172217Sri Lanka 0.3529Thailand 353129Vietnam

Source :IEA (2006a).

R.M.Shrestha et al./Energy Policy 37(2009)2375–2384

2376

There were also noticeable changes taking place in the fuel-mix in electricity generation during1980–2004:in1980,thermal power generation was mainly based on fuel oil in eight of the countries under the study(i.e.,Indonesia,Japan,South Korea, Malaysia,Philippines,Singapore,Sri Lanka and Thailand). Over time,the share of oil in thermal generation was decreasing in all of them except New Zealand and Pakistan.There has been a shift in fuel use from oil to coal in Australia,China,India, Indonesia and South Korea and from oil to natural gas in the rest of the countries.

Fig.1a and b show the electricity intensity of the selected countries during1980–2004.As can be seen,the intensity was increasing in seven countries,i.e.,Bangladesh,India,Indonesia, Malaysia,Pakistan,Thailand and Vietnam and decreasing in China,while it was almost stable in other countries.Countries like,Bangladesh,Pakistan and Vietnam have registered a rapid increase in electricity intensity,which could be partly due to the increased level of electricity consumption in the household sector with the growing electri?cation in these countries.3.Methodology and data sources

3.1.Factor decomposition methodology

In the literature,a number of index decomposition methodol-ogies are available,such as Laspeyres,Arithmetic mean Divisia, Log-Mean Divisia,Paasche,etc.(see Ang and Zhang,2000).The re?ned Log-Mean Divisia Index(LMDI)methodology uses a logarithmic mean weight function,which allows perfect decom-position of a change into factors without a residual term(Ang and Zhang,2000and Ang and Liu,2001).The LMDI is used here to analyze the factors behind the changes in CO2emission from the power sector.

To present the methodology used in this study,?rst the following symbols are de?ned:

E t total CO2emissions from power generation in year t

E it CO2emission from power generation by fuel type i in

year t

F it amount of fuel type i used in year t

G it electricity generation by fuel type i in year t

f it fuel intensity of electricity generation based on fuel type

i in year t(?F it/G it)

G t total electricity generation in year t

Y t gross domestic product at constant prices

A t electricity intensity(?G t/Y t)

k conversion factor(from carbon to carbon dioxide)

c it carbon content of fuel type i(fraction of total weight)

Total CO2emission from the electricity sector as a whole is the sum of CO2emissions from different types of thermal generation,i.e.,

E t?

E it(1) Eq.(1)can also be expressed as

E t?

E it

G it

G t

G t(2)

where,E it/G it is the CO2emission intensity of power generation (de?ned as CO2emission per unit of power generation);G it/G t is

Table3

Share of thermal sources in total electricity generation(%).

Country198019902004

Australia869092

Bangladesh758994

China818181

India587382

Indonesia797986

Japan706561

Malaysia868393

New Zealand81926

Pakistan365467

Philippines696966

Singapore100100100

South Korea364158

Sri Lanka110.263

Thailand927895

Vietnam683861

Source:IEA(2006b,and2006c).

Table4

Power generation ef?ciency and shares of thermal power generation by fuel type.a

Country Coal Oil Gas

198020041980200419802004

Z S Z S Z S Z S Z S Z S

Australia3073.33779.440 5.4310.6397.33212.3 Bangladesh–0.0–0.02626.627 6.72648.63187.5 China2454.63077.94625.834 3.3340.2350.4 India2449.53069.1308.436 5.4120.5429.5 Indonesia–0.02940.12372.03730.2–0.04016.1 Japan459.54227.55046.2489.24514.24522.8 Malaysia–0.04227.93185.036 3.338 1.14361.8 New Zealand23 1.93111.1220.217o0.1457.54716.0 Pakistan290.2190.229 1.13515.93140.53850.7 Philippines26 1.03728.93167.93815.2–0.05322.1 Singapore–0.0–0.038100.04531.2–0.04168.8 South Korea25 6.63738.83978.755b7.6–0.04816.2 Sri Lanka–0.0–0.01811.33963.2–0.0–0.0 Thailand349.83615.93381.438 6.2–0.04271.0 Vietnam1639.93615.33018.331 3.7–0.03742.7

Source:IEA(2006b,2006c,and2007).

a Z?average ef?ciency of power generation(%),S?share of the fossil fuel in total electricity generation in the country(%).

b Including electricity generation from combined heat and power plants.

R.M.Shrestha et al./Energy Policy37(2009)2375–23842377

the share of electricity generation based on fuel type i in total generation;G t /Y t is the electricity intensity (de?ned as electricity generation required per unit of GDP)in year t .

Eq.(2)could be expressed as E t ?

kc it

F it

G it G it G t G t

Y t

(3)

That is,

E t ?

kc it f it g it 2t Y t (4)

E t ?2t Y t

kc it f it g it

(5)

Following Shrestha and Timilsina (1996),a change in total CO 2emission from electricity generation (in logarithmic terms)between year t and t à1can be decomposed as ln

E t E t à1?ln 2t 2t à1tln Y t Y t à1t

X i ~w it ln c it c it à1tX i

~w it ln f

it f it à1

tX i

it ln g

it g it à1

(6)

where,~w

it represents the weight of fuel type i in year t and represents the relative contribution of the fuel in the change due to fuel quality,fuel intensity and generation-structure effects.In the case of the Log-Mean Divisia Index method,following Ang and

Liu (2001),~w it is de?ned as ~w

it ?L ew it ;w it à1T

P i

L ew it ;w it à1T

,with

L ew it ;w it à1T?ew it à1àw it T

it à1it ,

and

w it ?c it f it g it

P n

i c it f it g it

Eq.(6)represents the Divisia decomposition of total change in CO 2emission during year t in the general form.The ?rst term in the right-hand side (RHS)of Eq.(6)is the effect due to changes in

1980E l e c t r i c i t y C o n s u m p t i o n p e r G D P ,k w h /U S $ (Y e a r 2000)

0.000.200.400.600.801.001.201980

E l e c t r i c i t y C o n s u m p t i o n p e r G D P ,k w h /U S $ (Y e a r 2000)

1985199019952000

Fig.1.(a)Electricity consumption/GDP in selected countries during 1980–2004.Source :IEA (2006b,2006c).(b)Electricity consumption/GDP in selected countries during 1980–2004.Source :IEA (2006b,2006c).

R.M.Shrestha et al./Energy Policy 37(2009)2375–2384

2378

electricity intensity(hereafter the‘‘electricity intensity effect’’(EIE)).The second term represents the effect of the change in economic growth(hereafter the‘‘economic growth effect’’(EGE)), while the third term represents the effect of changes in fuel qualities(hereafter the‘‘fuel quality effect’’).The fourth and?fth terms represent the effects on CO2emission of changes in generation(or conversion)ef?ciencies of thermal plants(here-after the‘‘fuel intensity effect’’(FIE))and changes in shares of different types of plants in total electricity generation(hereafter the‘‘generation-structure effect’’(GSE)),respectively.The type and quality of fuels used may change over time with changes in the source of fuel supply.However,due to non-availability of time series data on fuel quality over the study period,fuel quality is assumed to remain unchanged during the period for the countries under this study.With this assumption,Eq.(6)can be expressed as

E t

tà1?ln

tà1

tln

Y t

tà1

it?

f it

ità1

it?

g it

ità1

(7)

Thus

E t tà1?

tà1

Y t

tà1

?exp

it?

f it

ità1

?exp

it?

g it

ità1

(8)

Following Ang and Liu(2001),Eq.(8)can be expressed as

e t?i t?y t?

f t?

g t(9) where,

e t

E t

E tà1

;i t

2tà1

;y t

Y t

Y tà1

;f t exp

it?

f it

f ità1

and g t exp

i ~w

it?

g it

ità1

The product i t?y t measures the output effect since,ln((A t/A tà1)?(Y t/Y tà1))?ln(G t/G tà1).

It should be noted here that the Divisia decomposition analysis assumes all variables to be positive.However,the data set used in this study also consists of a number of zero values for some types of electricity generation in some countries(especially,when some power generation is based on fuels or technologies not used previously).As such,the Log-Mean Divisia Index cannot be used consistently over the study period in such countries.Ang and Choi (1997)have handled the zero-value problem by replacing the zero values for electricity generation with a small positive number‘‘d’’(referred to as‘‘Small Value’’(SV)strategy in the Log-Mean Divisia Index method).We follow the SV strategy of Ang and Choi(1997) to handle the zero values in the present analysis.1

3.2.Data sources

Data on fuel inputs,electricity generation and GDP were based on IEA(2006a,2006b).CO2Emission factors for different types of fuels are based on IPCC(1996).4.Results and discussion

4.1.Evolution of CO2emissions during1980–2004

The evolution of CO2emission from the power sector during 1980–2004in the study countries are shown in Fig.2a and b along with the values of the economic growth effect,fuel intensity effect,generation-structure effect and electricity intensity effect. The power sector CO2emissions in2004were more than?ve times of that in1980in Bangladesh,China,India,Indonesia, Pakistan,South Korea and Sri Lanka.In New Zealand,Sri Lanka, Philippines and Vietnam,the sector’s CO2emission was increasing in some years and decreasing in others.In the case of China, Malaysia,Philippines,South Korea,Sri Lanka and Thailand,the CO2emission was growing more rapidly during1990s than that during1980s.The growth rates of CO2emission were relatively low in Australia and Japan—the two most developed economies among the countries under the study.During the Asian economic crisis of1997–1998,the power sector CO2emission had declined in Indonesia,South Korea and Thailand.In all countries,except Australia and Singapore,the CO2emission was increasing during 2000–2004.The sector’s CO2emission exhibited some?uctua-tions in New Zealand,Philippines and Sri Lanka during the period.

4.2.Factors affecting the power sector CO2emissions

4.2.1.Factor decomposition during1980–1989

Table5shows the contribution of each factor to the power sector CO2emissions between1980and1989in an index form (with1980values?1.0).Since this is a multiplicative decom-position,the product of the indices of all effects is equal to the index of actual CO2emission.As shown in the table,the economic growth effect was found to contribute positively(i.e.,the EGE index was higher than unity)to the growth of CO2emission in all countries during the period.This re?ects the growth of electricity generation associated with the rising GDP.The EGE was the main factor behind the increase in CO2emission during the period in eleven countries(i.e.,Australia,China,India,Japan,Malaysia, Pakistan,Singapore,South Korea,Sri Lanka,Thailand and Vietnam).In?ve of them(i.e.,China,Japan,Malaysia,South Korea and Thailand),the CO2emission from the power sector would have exceeded the actual CO2emission level during the period purely due to the increase in GDP,if all other factors had remained unchanged.The increase in CO2emission due to the EGE was counteracted by the electricity intensity effect in China,by the generation-structure effect in Japan,South Korea and Thailand and by both the fuel intensity effect and GSE in Malaysia.

The EIE was found to contribute towards increasing the CO2 emissions in all countries except China and Japan during 1980–1989.It was the predominant factor behind the growth in CO2emissions in Bangladesh,Indonesia and Philippines during the period.On the contrary,the FIE had contributed towards a reduction of the CO2emission in all countries except Pakistan and Thailand.In the case of Pakistan,Singapore and Thailand,there was no signi?cant change in the CO2emission due to FIE.The FIE was?uctuating in New Zealand(Fig.2a).In all other countries,the ef?ciency of coal-,oil-and gas-?red power generation had improved during the period.More speci?cally,the FIE had improved due to the increased ef?ciencies of gas-?red power generation(from25%to30%)in Bangladesh,oil-?red power generation(from23%to33%)in Indonesia and coal-?red generation(from31%to41%)and oil-?red generation(from30% to34%)in the Philippines.The power sector CO2emissions from the Philippines would have been higher than the actual value during1980–1989,if the EIE was not counteracted by the FIE(note

1Wood and Lenzen(2006)argue that the SV strategy is not necessarily robust

because it would produce signi?cant errors if applied in the decomposition of a

data set containing a large number of zeros and small values and they proposed to

use an analytical limit(AL)strategy.However,Ang and Liu(2007)state that the SV

strategy is generally robust if the value of d is appropriately chosen and that the AL

is superior on theoretical grounds.

R.M.Shrestha et al./Energy Policy37(2009)2375–23842379

that the EIE had contributed towards increasing CO 2emission by 41%,while the FIE contributed towards decreasing the emission by 20%).

The GSE had acted sympathetically towards the growth of CO 2emission in the case of six countries (Australia,Bangladesh,China,India,New Zealand and Pakistan).It was mainly due to the increased share of thermal power generation in Australia,Bangladesh,India,New Zealand and Pakistan,while it was due to the increased share of coal-based power generation (from 59.5%in 1980to 71.6%in 1989)in China.The GSE had acted towards decreasing the CO 2emission in six countries i.e.,Japan,Malaysia,Philippines,South Korea,Sri Lanka and Thailand.This was due to an increase in the gas-?red electricity generation in Thailand (the share of the gas-?red generation in that country increased from 0%to about 51%during the period)and a decrease in the overall share of thermal power generation in rest of the countries.In the

0.01.02.03.04.05.06.07.08.09.01980

1992Year Bangladesh

0.51.01.52.02.51980Year Australia

012345678910China

012345678India

024********

Indonesia

0.51.0

1.5

2.0

Japan

0123456Malaysia

Generation Mix Effect

Electricity Intensity Effect.

012345New Zealand

I n d e x (1980 = 1.0)

19841988

1992199620002004

19841988

199620002004

1980

1992Year 1980

Year 19841988

199219962000200419841988

199620002004

1980

1992Year 1980

Year 1984

1988

19921996

2000

2004

1984

1988

1996

2000

2004

1980

1992Year

1980

Year

19841988

1992199620002004

1984

1988

199620002004

Fig.2a.Factors contributing to CO 2emissions from power generation during 1980–2004.

R.M.Shrestha et al./Energy Policy 37(2009)2375–2384

2380

case of New Zealand and Sri Lanka,the sector’s CO 2emission exhibited wide ?uctuation (as can be seen in Fig.2a and b )during the period due to the ?uctuations in the GSE caused by signi?cant variations in the share of hydropower generation.It should be noted that the EGE was the single most in?uential factor in increasing the power sector CO 2emission during the period in ten countries (Australia,China,India,Japan,Malaysia,Pakistan,Singapore,South Korea,Thailand and Vietnam),while

0123456

Vietnam

0.01.02.03.04.05.0Thailand

01234567891980

Year

Pakistan

0.00.5

1.01.5

2.02.5

3.03.5

Philippines

012345Singapore

468101214

Sri Lanka

1234567South Korea

Generation Mix Effect

Electricity Intensity Effect.

I n d e x (1980 = 1.0)

198419881992199620002004

1980

Year

198419881992199620002004

1980

Year 1984

1988

19921996

2000

2004

1980

Year 198419881992199620002004

1980

Year

1984

1988

19921996

2000

2004

1980

Year

1984

1988

19921996

2000

2004

1980

Year 19841988

19921996

2000

2004

Fig.2b.Factors contributing to CO 2emissions from power generation during 1980–2004.

R.M.Shrestha et al./Energy Policy 37(2009)2375–2384

2381

the EIE was the biggest contributor in three countries (Bangladesh,Indonesia and the Philippines).The GSE was the biggest force behind the changes in CO2emission in two countries (New Zealand and Sri Lanka).It is also interesting to note that both the EGE and GSE had contributed to the growth of CO2 emission in China and India.The EIE was an additional factor behind the increase in the CO2emission in India.

4.2.2.Factor decomposition during1990–1997

The power sector CO2emission had an increasing trend in all the countries between1990and1997.However,it shows some ?uctuations in the case of New Zealand,Singapore,Sri Lanka and Vietnam mainly due to?uctuations in annual hydropower generation in New Zealand,Sri Lanka and Vietnam and due to changes in fuel intensity in Singapore.Indices of different factors behind the changes in the CO2emissions between1990and1997 are presented in Table6.In six of the selected countries(i.e., Bangladesh,Malaysia,Pakistan,Philippines,Thailand and South Korea),the EGE,EIE and GSE acted together for the increase in CO2 emissions during the period.The EGE and EIE were mainly responsible for the changes in the emissions in Indonesia,Japan, Thailand and Vietnam.In the case of New Zealand,South Korea and Sri Lanka,the GSE and FIE were the major factors behind the changes in the emissions.The EGE and GSE were the main contributors to the increase in the emissions in India and Philippines,respectively.

The EGE was increasing in all countries during the period and thus acted towards the growth in CO2emissions from the sector during the period.In fact,the EGE was most in?uential in the growth of the sector’s emission in all countries under the study except New Zealand,Philippines,South Korea and Sri Lanka.The growth of the EGE was higher than the actual growth of CO2 emissions in China,Japan,South Korea and Vietnam,which means that the CO2emissions in those countries would have been signi?cantly higher but for the counteracting effects of other factors(i.e.,the EIE in China,FIE and GSE in Japan and Vietnam, and FIE in South Korea).It was mainly the GSE,which had counteracted the EGE in Japan as the share of non-thermal generation increased from38%in1990to43%in1997,while the FIE(due to the increased ef?ciencies of coal-and oil-?red power plants)was the only counteracting force in South Korea.The EIE was acting towards decreasing the sector’s CO2emission in China, New Zealand and Singapore during the period while it was mostly acting towards increasing the CO2emission in other countries.

The generation-structure effect had acted against the growth of CO2emission during the period in four countries(i.e., Indonesia,Japan,Singapore and Vietnam).This was due to the increased share of hydropower generation in Vietnam(from62% to70%),increased nuclear and renewable energy based power generation in Japan(share of nuclear,renewable and hydropower generation increased from38%to43%during the period)and increased gas-based generation in the rest of the countries.The GSE was favorable to increasing the CO2emission in all other countries.The main reason for this was the increased share of coal-based generation(from65%to68%)and decreased share (from28%to20%)of non-thermal generation during the period in India;similarly,it was due to the increased share of coal-based generation in Australia(from80%to85%)and China(from72%to 77%)and due to the decreased share of hydropower generation (from11%to6%)in Bangladesh.In Pakistan,the main reason was the increased share of oil(from20%to38%)and decreasing share of non-thermal power generation(from46%to36%),while it was due to the increasing share of coal generation(from8%to18%)in Philippines.The GSE was the most in?uential factor behind the increase in CO2emission from the power sector in New Zealand, Philippines,South Korea and Sri Lanka).

The fuel intensity effect was acting against the increase in CO2 emissions in nine countries(Australia,Bangladesh,Indonesia, Japan,Malaysia,Pakistan,South Korea,Sri Lanka and Vietnam), while its in?uence was negligible in the case of China, New Zealand,Philippines and Thailand.

The electricity intensity effect was favorable to the growth of CO2emission in all countries except Australia,China,New Zealand and Singapore during1990–1997.As can be seen from Table6,the EIE was the second largest factor behind the increase in the power sector CO2emissions from Bangladesh,India,Indonesia,Japan, Malaysia,Pakistan,Philippines,Thailand and Vietnam.

4.2.3.Factor decomposition during1998–2004

Table7presents the decomposition of factors behind the changes in the power sector CO2emissions between1998and 2004.As shown in the table,like in the earlier periods,the

Table5

Indices of CO2emission between1980and1989and contributing factors(1980 values?1.0).

Country CO2emission index Decomposition of factors a

EIE EGE FIE GSE

Australia 1.42 1.15 1.350.88 1.04 Bangladesh 2.85 2.22 1.360.90 1.04 China 2.020.88 2.340.93 1.05 India 2.65 1.38 1.660.84 1.37 Indonesia 2.90 2.07 1.700.860.95 Japan 1.160.97 1.420.930.91 Malaysia 1.35 1.25 1.640.750.87 New Zealand 2.52 1.15 1.200.99 1.83 Pakistan 3.47 1.31 1.76 1.01 1.36 Philippines 1.18 1.41 1.150.800.91 Singapore 1.95 1.07 1.870.98 1.00 South Korea 1.27 1.14 2.100.940.56 Sri Lanka0.15 1.21 1.420.520.17 Thailand 1.81 1.35 1.92 1.030.68 Vietnam 1.51 1.32 1.660.760.88

a EIE?electricity intensity effect;EGE?economic growth effect;FIE?fuel intensity effect and GSE?generation structure effect.Table6

Indices of CO2emission between1990and1997and contributing factors(1990 values?1.0).

Country CO2emission index Decomposition of factors a

EIE EGE FIE GSE

Australia 1.200.93 1.270.99 1.02 Bangladesh 1.56 1.12 1.370.93 1.10 China 1.910.87 2.10 1.01 1.04 India 1.79 1.08 1.45 1.06 1.08 Indonesia 2.20 1.39 1.650.970.99 Japan 1.04 1.05 1.130.970.90 Malaysia 1.91 1.35 1.860.72 1.05 New Zealand 1.550.90 1.22 1.01 1.40 Pakistan 1.81 1.24 1.330.89 1.24 Philippines 2.17 1.28 1.24 1.01 1.35 Singapore 1.490.94 1.81 1.180.75 South Korea 2.84 1.25 1.610.90 1.69 Sri Lanka217.00 1.14 1.440.64207.00 Thailand 2.09 1.31 1.58 1.01 1.01 Vietnam 1.68 1.26 1.750.920.83

a EIE?electricity intensity effect;EGE?economic growth effect;FIE?fuel intensity effect and GSE?generation structure effect.

R.M.Shrestha et al./Energy Policy37(2009)2375–2384 2382

economic growth effect contributed positively to the growth in CO2emission in all countries during the period.The CO2emission due to EGE would be growing at a higher rate than the actual CO2 emission in Australia,India,Philippines,Singapore and Thailand during1998–2004.

The EIE contributed towards reducing the CO2emission in India,New Zealand,Singapore and Thailand,while it acted in the opposite direction in Bangladesh,China,Indonesia,Pakistan, Philippines,South Korea and Vietnam.The EIE had almost no effect on changes in CO2emissions in the case of Australia, Malaysia and Japan.The role of EIE was almost as big as that of the EGE in the case of Indonesia.

The generation share effect had acted towards reducing the CO2emissions during1998–2004in four countries,i.e.,Pakistan, Philippines,Singapore and Thailand,mainly because of the increased share of the gas-based power generation during the period,i.e.,from25%to51%in Pakistan,from0%to22%in Philippines,from28%to69%in Singapore and from47%to72%in Thailand.The GSE was an in?uence behind the increase in the CO2 emissions in India,Indonesia,Japan,Malaysia,New Zealand,South Korea,Sri Lanka and Vietnam.This was due to the increased share of coal-?red power plants and reduced share of non-thermal generations in India,Indonesia,Japan,New Zealand and South Korea,while it was due to the reduced share of hydropower plus increasing thermal power generation in the case of Sri Lanka and Vietnam.The increased share of coal-based power generation was the main reason in the case of Malaysia.

The fuel intensity effect was acting against an increase in the power sector CO2emission during1998–2004in all of the study countries except four of the South Asian countries,i.e., Bangladesh,India,Pakistan and Sri Lanka.Thus the FIE counter-acted the EGE and other factors contributing towards an increase in the emission to some extent in majority of the study countries. In fact,the level of the power sector emission during the period would have been signi?cantly higher in countries like Singapore and Vietnam but for the counteracting effect of the fuel intensity effect.

It should be noted here that the magnitudes of both the EGE and EIE were signi?cantly smaller during1998–2004than that during1990–1997in Indonesia,Malaysia,South Korea and Thailand(these were among the countries hardest hit by the Asian?nancial crisis of1997–1998)and re?ect the slower growth in GDP and electricity requirements in these countries in the aftermath of the?nancial crisis(see Tables6and7).

The decomposition analysis also shows that the GSE played a more signi?cant role in the growth of the CO2emission in Indonesia,Japan,Malaysia,New Zealand and Vietnam during 1998–2004than that during1990–1997.Furthermore,it shows that the EIE was relatively more in?uential in the rise of CO2 emission in Australia,Bangladesh,China and Vietnam during 1998–2004than that during1990–1997.

5.Policy implications

The present analysis shows that the economic growth-and electricity intensity-effects had contributed positively towards increasing the CO2emissions in most of the countries under the study.Since the electricity demand and hence the power sector CO2emission are directly linked to the economic growth effect, promoting energy ef?ciency improvement/demand side manage-ment as well as low-and zero-carbon power generation technologies is the main option to reduce the CO2emission in these countries.As such,these countries may consider adopting policies to promote sustainable power system development,e.g., carbon tax and energy tax with appropriate tax recycling schemes so as to minimize the effect of economic growth in the power sector CO2emission.

In several countries with the rising electricity intensity effect (e.g.,Bangladesh,Indonesia,Sri Lanka and Vietnam)during the more recent period of1998–2004,energy ef?ciency improvement and conservation measures would be the most important option to reduce CO2emission from the power sector.This study has also found that in some of the countries including India,the fuel intensity effect had helped to increase the CO2emission from the power sector in the more recent period,while in several others including China,it had acted towards marginally reducing the CO2 emissions.It should be noted here that in major coal-using countries,like China and India,the overall ef?ciency of coal-based power generation is signi?cantly below that of the OECD countries at present.This suggests that effective policies and measures to promote the large-scale deployment of ef?cient power generation technologies(e.g.,clean coal power technolo-gies)are warranted in those countries in order to reduce the CO2 emission.Again,policies like energy tax and carbon tax could be some of the promising policy options towards that end.

6.Conclusions

The decomposition analysis presented in this paper has identi?ed the key factors responsible for changes in the CO2 emission from the power sector of the countries under the study during1980–2004.Overall,the economic growth-and electricity intensity-effects were contributing towards the increase of CO2 emissions,while the fuel intensity-and generation structure-effects had acted in the opposite direction in most of the countries.However,the degree of in?uence of these factors varies widely across the countries.The study showed that in ten of the selected countries(i.e.,Australia,China,India,Japan,Malaysia, Pakistan,Singapore,South Korea,Thailand and Vietnam),the economic growth effect was the main factor behind the increase in the power sector CO2emission.The electricity intensity effect was the main force behind the increase in the sector’s CO2emission in three countries(Bangladesh,Indonesia and Philippines)while the generation-structure effect was the main factor in two countries(Sri Lanka and New Zealand).

Table7

Indices of the CO2emission between1998and2004and the contributing factors

(1998values?1.0).

Country CO2emission index Decomposition of factors a

EIE EGE FIE GSE

Australia 1.17 1.01 1.210.95 1.00

Bangladesh 1.78 1.22 1.37 1.07 1.00

China 1.97 1.14 1.670.95 1.03

India 1.350.87 1.42 1.03 1.06

Indonesia 1.82 1.23 1.260.98 1.20

Japan 1.24 1.00 1.060.97 1.20

Malaysia 1.480.99 1.370.94 1.16

New Zealand 1.600.92 1.260.93 1.45

Pakistan 1.28 1.03 1.27 1.050.93

Philippines 1.16 1.14 1.280.950.84

Singapore0.900.98 1.300.810.87

South Korea 1.79 1.16 1.420.99 1.11

Sri Lanka 3.10 1.12 1.26 1.08 2.03

Thailand 1.150.97 1.340.970.92

Vietnam 1.92 1.46 1.480.80 1.11

a EIE?electricity intensity effect;EGE?economic growth effect;FIE?fuel

intensity effect and GSE?generation structure effect.

R.M.Shrestha et al./Energy Policy37(2009)2375–23842383

The economic growth effect has contributed towards increas-ing the CO2emission in all countries under this study during the three sub-periods:i.e.,during1980–1989,1990–1997and 1998–2004.The electricity intensity effect acted towards increas-ing the CO2emission in at least11countries under the study during all three sub-periods.The fuel intensity effect was acting towards increasing the CO2emission in more than half of the countries during the entire period of1980–2004.It was acting in opposite direction in13countries during1980–1989,in at least nine countries during1990–1997and1998–2004.In half of the countries,the generation-structure effect was acting towards reducing the CO2emission during1980–1989,while it was acting towards increasing the CO2emission in eleven countries during1990–1997and in nine countries during 1998–2004.

Acknowledgement

The authors like to thank an anonymous referee of the journal for his/her helpful comments on the previous version of the paper. However,the authors only are responsible for any remaining error in the paper.References

Ang,B.W.,Choi,K.H.,1997.Decomposition of aggregate energy and gas emission intensities for industry:a re?ned Divisia index method.The Energy Journal18

(3),59–73.

Ang,B.W.,Choi,K.H.,2002.Boundary problem in carbon emission decomposition.

Energy Policy30,1201–1205.

Ang,B.W.,Liu,N.,2007.Handling zero values in the logarithmic mean Divisia index decomposition approach.Energy Policy35(1),238–247.

Ang,B.W.,Zhang,F.Q.,2000.A survey of decomposition analysis in energy and environmental studies.Energy25,1149–1179.

Ang, B.W.,Zhang, F.Q.,Choi,K.H.,1998.Factorizing changes in energy and environmental indicators through decomposition.Energy23(6),489–495. Ang, B.W.,Liu, F.L.,2001.A new energy decomposition method:perfect in decomposition and consistent in aggregation.Energy26,537–548. International Energy Agency(IEA),2006a.CO2Emissions from Fuel Combustion, 1971–2004.CD-ROM Data Base.IEA,Paris.

International Energy Agency(IEA),2006b.Energy Balances of Non-OECD Countries:1971–2004,CD ROM Data Base.IEA,Paris.

International Energy Agency(IEA),2006c.Energy Balances of OECD Countries: 1971–2004,CD ROM Data Base.IEA,Paris.

International Energy Agency(IEA),2007.Energy Balances of OECD Countries: 2004–2005,CD ROM Data Base.IEA,Paris.

Inter-Governmental Panel on Climate Change(IPCC),1996.Revised IPCC Guidelines for National Greenhouse Gas Inventories:Reference Manual Vol.3.IPCC,Bracknell. Shrestha,R.M.,Timilsina,G.R.,1996.Factors affecting CO2intensities of power sector in Asia:a Divisia decomposition analysis.Energy Economics18,283–293. Wood,R.,Lenzen,M.,2006.Zero-value problems of the logarithmic mean divisia index decomposition method.Energy Policy34,1326–1331.

R.M.Shrestha et al./Energy Policy37(2009)2375–2384 2384