Decomposing manufacturing CO2 emission changes: An improved production-theoretical decomposition analysis based on industrial linkage theory.

Identifying key drivers of manufacturing CO 2 emissions is critical to carbon reduction practices. For manufacturing, CO 2 emissions are mainly determined by production capacity and production scale. However, traditional production-theoretical decomposition analysis (PDA) fails to consider production-scale-related drivers. To better support policy development and implementation, this paper improves PDA based on industrial linkage theory. The improved model can identify seven production-capacity-related drivers and five production-scale-related drivers, allowing a comprehensive understanding of CO 2 emission drivers. Then this model is implemented to investigate CO 2 emission changes in 18 manufacturing sectors in Hubei Province, China, from 2012 to 2017. Results show that manufacturing CO 2 reduction efforts in Hubei Province have yielded some achievements, with reduced potential energy intensity and improved CO 2 emission technical efficiency in most sectors. Changes in external market demand and final demand structure have contributed to CO 2 reduction in most sectors. Results also reveal some problems in manufacturing in Hubei Province, such as the inability to improve CO 2 emission technical efficiency and CO 2 emission technology strength, the slow improvement of energy utilization technical efficiency and energy utilization technology strength, and the reduction of value-added rate. • A new decomposition analysis model is built to decompose CO 2 emission changes. • The new model integrates industrial linkage theory into PDA. • Seven of twelve drivers relate to production capacity and five to production scale. • CO 2 emission changes in 18 manufacturing sectors in Hubei Province are decomposed. • Several important implications for manufacturing CO 2 reduction are proposed. [ABSTRACT FROM AUTHOR]