Bridging Economic Development and Environmental Protection: Decomposition of CO2 Emissions in a Romanian Context

Climate change governance has become an essential concern for policymakers, with carbon dioxide (CO2) emissions representing one of the most pressing challenges to sustainable economic development. In this context, understanding the main drivers of CO2 emissions is essential for designing effective public policies that support Romania’s transition toward a low-carbon economy. This study investigates the determinants of CO2 emissions in Romania’s energy sector between 2008 and 2023 using the Logarithmic Mean Divisia Index (LMDI) decomposition method. The analysis considers five key elements: the carbon intensity effect (ΔC), the energy mix effect (ΔM), the energy efficiency effect (ΔL), the economic effect (ΔB), and the population effect (ΔP). The results highlight the need for coherent governance frameworks and targeted policy measures to balance economic expansion with environmental sustainability. The study offers actionable insights for public authorities aiming to strengthen Romania’s climate governance and align national strategies with the objectives of the European Green Deal and climate neutrality by 2050.