Ethiopia, among the fastest growing economies worldwide, is witnessing rapid urbanization and industrialization that is fueled by greater energy consumption and high levels of CO2 emissions. Currently, Ethiopia is the third largest CO2 emitter in East Africa, yet no comprehensive study has characterized the major drivers of economy-wide CO2 emissions. This paper examines the energy-related CO2 emissions in Ethiopia, and their driving forces between 1990 and 2017 using Kaya identity combined with Logarithmic Mean Divisia Index (LMDI) decomposition approach. Main findings reveal that energy-based CO2 emissions have been strongly driven by the economic effect (52%), population effect (43%), and fossil fuel mix effect (40%) while the role of emission intensity effect (14%) was less pronounced during the study period. At the same time, energy intensity improvements have slowed down the growth of CO2 emissions by 49% indicating significant progress towards reduced energy per unit of gross domestic product (GDP) during 1990-2017. Nonetheless, for Ethiopia to achieve its 2030 targets of low-carbon economy, further improvements through reduced emission intensity (in the industrial sector) and fossil fuel share (in the national energy mix) are recommended. Energy intensity could be further improved by technological innovation and promotion of energy-frugal industries.
Driving Forces of Energy-Related CO2 Emissions Based on Expanded IPAT Decomposition Analysis: Evidence from ASEAN and Four Selected Countries
