Economic Growth and Carbon Emissions in Croatia and Albania: Evidence from Annual and Medium-Term Decoupling Patterns

This study examines the relationship between economic growth and CO2 emissions in Croatia and Albania from 1995 to 2024, using the EU27 as a benchmark. The analysis combines carbon intensity trends, Mann–Kendall tests, Sen’s slope estimates, Tapio decoupling elasticities, and a supplementary LMDI decomposition. Contiguous intervals and rolling five-year windows, together with threshold, near-zero GDP, and alternative emissions-source checks, assess temporal consistency and robustness. Carbon intensity declined significantly in all three cases, but decoupling outcomes differed across time horizons. Favorable annual decoupling occurred in 44.8% of observations in Croatia, 55.2% in Albania, and 69.0% in the EU27, while the corresponding descriptive shares across the overlapping five-year windows were 64.0%, 56.0%, and 92.0%. The differences in favorable annual decoupling shares were not statistically significant. The LMDI results indicate that improved energy intensity offset part of the emissions pressure associated with economic activity in Croatia and Albania, while Albania’s carbon-intensity-of-energy effect was close to zero. Annual decoupling results were more sensitive to the emissions source than the medium-term comparison. CBAM-covered products accounted for 14.02% of EU27 imports from Albania in 2024. Overall, the results show that assessments of low-carbon transition progress can differ with the time horizon considered and that domestic decoupling may coexist with trade exposure to carbon regulation.