Analysis of Key Drivers on China's Carbon Emissions and Policy Rethinking Based on LMDI: 1995–2010

Economic policy and energy policy are two major factors of energy consumption and carbon emissions. The economic factor is external and energy supply structure and efficiency are intrinsic factors. Based on a carbon emissions completely decomposed analysis model, the logarithmic mean Divisia Index (LMDI) system analyzes the impact of carbon emission changes and the contribution rate in China from 1995 to 2010. The decomposition factors include four parts: economies of scale, structure effect, energy intensity effect and carbon intensity effects. Model results show that the contribution rate of the four effects is different and from 1995 to 2010 the greatest factors impacting increases in carbon emissions were economic development (contribution rate of 155%) and industrial structure change (contribution rate of 10.6%). The reduction in carbon emissions was mainly the result of a decline in energy intensity (contribution rate of -63.7%). The increase in carbon emissions in recent years is the result of changes in major economies of scale with 168.2% contribution rate, changes in carbon intensity (contribution rate of 4%) and industrial restructuring (contribution rate of 1.3%) have also contributed to increasing carbon emissions. Energy intensity declined only played a role in reducing carbon emissions (contribution rate -73.5%). These results suggest that China needs to rethink industrial policy and energy development measures, strengthen future energy saving and emission mitigation policies and strengthen investment in low—carbon energy technologies and policy support.