International comparison of industrial CO2 emission trends and the energy efficiency paradox utilizing production-based decomposition

As global concern about climate change increases, the need to control and mitigate greenhouse gas emissions is likely to emerge as a worldwide policy agenda. We determined world-wide carbon dioxide (CO2) emission trends and six underlying forces driving emissions from the industry sector with production-based decomposition from 1990 to 2006. We also conducted a cross-country analysis in order to identify each country's technical potential for improving its CO2 intensity. Our model provides more detailed information about the influence of both production technical efficiency and technological change on CO2 emissions and we show that the relative degree of each country's energy efficiency paradox phenomenon can be identified empirically. As a result, trends show that economic activity change has been the dominant contributor to the growth of CO2 emissions while changes in potential energy intensity and energy mix have led to emission reduction in almost all OECD and non-OECD countries. In the impacts of production technology (i.e., technical efficiency and technological change), the study reveals mixed results but generally shows that OECD countries diffuse their production technologies more efficiently than do non-OECD countries. From emission mitigation potentials, we also identified that many OECD and non-OECD countries have demonstrated a reduced potential for mitigation over time.