Regional carbon emission efficiency analysis and factor decomposition: Cases from South Korea

In response to climate change, many countries aim for carbon neutrality, making regional carbon emissions reduction increasingly important. However, in many cases, no information is available on how technological heterogeneity impacts carbon neutrality. This study examines the impact of technological innovation on regional carbon intensity and its gaps and explores whether it can reduce regional disparities in the process of achieving carbon neutrality. This study empirically analyzes the impact of technological innovation on regional carbon intensity gaps using efficiency analysis and Blinder-Oaxaca (B-O) decomposition. Stochastic frontier analysis (SFA) and B-O decomposition were conducted using 2020 data from 227 cities, counties, and districts (si-gun-gu) in South Korea. The SFA results indicate that the average carbon emission efficiency scores for the top and bottom 30 % of regions are 0.765 and 0.271, respectively. The B-O decomposition analysis shows that patents can reduce 0.13 % and 0.73 % of the explainable and unexplainable differences, respectively, between the two groups. In conclusion, technological innovation can improve the carbon intensity of low-efficiency regions, thereby reducing the gap with high-efficiency regions. Accordingly, carbon neutrality policies leveraging technological innovation should be developed with consideration of the industrial and energy structures, as well as the economic characteristics of each region. • Heterogeneous technological innovation obscures regional carbon intensity study. • Carbon intensity variability was studied via SFA and B-O decomposition. • Technological innovation helps in reducing the carbon intensity gap between regions. • Technological innovation improves regional carbon intensity.