Decomposition analysis of CO₂ emissions in India: Logarithmic mean divisia index

The study is conducted to quantify driving forces of carbon dioxide (CO₂) emissions using decomposition analysis. The paper investigates the determinants of CO₂ emissions using the Logarithmic Mean Divisia Index (LMDI) for the period 2011-2021. The objective of the paper is to find determinants of CO₂ emissions by applying LMDI, where residuals are fully distributed to the determinants. The drivers of CO₂ were divided into the population, economic activity, energy intensity, and energy structure effects. Using each fuel type's unique emission factor, CO₂ emissions were computed. Identifying the drivers responsible for CO₂ emissions in India would aid in determining the areas that require attention. The study finds that population and economic activity effects have always been positive contributors to CO₂ emissions in India. However, the contribution of the population has been positive while economic growth has made up for most of the total. The energy intensity effect and structural effect have showcased a negative trend from 2011 to 2021. Negative energy and structural effects suggest India is improving in terms of energy use.