Decomposition analysis of CO2 Emissions from the Greek Manufacturing Sector

The aim of this paper is to identify the factors that have influenced changes in the amount of carbon
dioxide (CO2) emitted from the Greek manufacturing sector as a whole and from three representative
subsectors. By means of an algebraic decomposition method the changes recorded during the period
1985-95 are analysed into four distinct factors: output level, energy intensity, fuel mix and structural
change. The results show that the observed reduction of industrial CO2 emissions is not only due to the
decrease of industrial energy intensity but also to the recession of the Greek manufacturing sector. The
two other factors, namely sectoral and fuel shifts were driving emissions upward, primarily because of
the increasing share of electricity - intensive sectors and the growing dependence of electricity generation
from lignite. It is concluded that for the reduction of industrial CO2 emissions in the long term,
policy measures should aim at further promoting energy saving technologies and encouraging the use
of natural gas and renewable energies.