Decomposition analysis and mitigation strategies of CO2 emissions from energy consumption in South Korea

Energy-related CO2 emissions in South Korea have increased substantially, outpacing those of Organisation for Economic Co-operation and Development (OECD) countries since 1990. To mitigate CO2 emissions in South Korea, we need to understand the main contributing factors to rising CO2 levels as part of the effort toward developing targeted policies. This paper aims to analyze the specific trends and influencing factors that have caused changes in emissions patterns in South Korea over a 15-year period. To this end, we employed the Log Mean Divisia index method with five energy consumption sectors and seven sub-sectors in terms of fuel mix (FM), energy intensity (EI), structural change (SC) and economic growth (EG). The results showed that EG was a dominant explanation for the increase in CO2 emissions in all of the sectors. The results also demonstrated that FM causes CO2 reduction across the array of sectors with the exception of the energy supply sector. CO2 reduction as a function of SC was also observed in manufacturing, services and residential sectors. Furthermore, EI was an important driver of CO2 reduction in most sectors except for several manufacturing sub-sectors. Based on these findings, it appears that South Korea should implement climate change policies that consider the specific influential factors associated with increasing CO2 emissions in each sector.