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How Malleable are the Greenhouse Gas Emission Intensities of the G7 Nations?

Why do countries greenhouse gas (GHG) intensities differ? How much of a country's GHG intensity is set by inflexible national circumstances, and how much may be altered by policy? These questions are common in climate change policy discourse and may influence emission reduction allocations. Despite the policy relevance of the discussion, little quantitative analysis has been done. In this paper we address these questions in the context of the G7 by applying a pair of simple quantitative methodologies: decomposition analysis and allocation of fossil fuel production emissions to end-users instead of producers. According to our analysis and available data, climate and geographic size both inflexible national characteristics can have a significant effect on a country's GHG intensity. A country's methods for producing electricity and net trade in fossil fuels are also significant, while industrial structure has little effect at the available level of data disaggregation.

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Energy Specializations: Energy Modeling – Other; Energy and the Environment – Climate Change and Greenhouse Gases; Energy and the Environment – Policy and Regulation

JEL Codes:
C59 - Econometric Modeling: Other
Q54 - Climate; Natural Disasters and Their Management; Global Warming
E60 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General

Keywords: Greenhouse gases, decomposition analysis, G7, climate change policy, emission intensity

DOI: 10.5547/ISSN0195-6574-EJ-Vol28-No1-7

Published in Volume 28, Number 1 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.