Factors that contribute to changes in CO2 emissions for the transport sector in France

1.0 Introduction

Environmental problems, especially ‘‘climate change” are currently major issues of global concern. Fossil fuel combustion, land use and deforestation can be cited among the main causes of the significant increase in anthropogenic greenhouse gases that lead to climate change. Adopted in Kyoto, Japan in December 1997 and enacted in February 2005, Kyoto Protocol is aimed at combating global warming by reducing greenhouse gas emissions and requires a timetable for accomplishment of those reductions. TALK ABOUT FRANCE AND THE KYOTO PROTOCOL.

Extensive use of nuclear power has clearly curtailed fossil fuel-related CO2 emissions from France, as a result France’s contribution to CO2 emissions is small; in 2006 CO2 emissions per capita was 5.97 tons, lower than the OECD average of 10.93 tons and also her share was 2.93% in total OECD emissions and 1.35% in world emissions. Carbon Dioxide emissions released from fossil fuel combustion in France has decreased from 461 million tons in 1980 to 369 million tons in 2007, however the transport sector remains one of the main sources of CO2 emissions in the country where proportion of transport-generated emissions increased from 88 million tons in 1980 to 131 million tons in 2007 representing an average annual growth rate of 1.5 %.

Therefore ramifications of transport sector CO2 emissions on climate-change mitigation have become an increasingly critical issue for researchers and policymakers; hence any effort to address climate change in France must pay attention to emissions from the transport sector. However, establishing any effective policies and measures to cut CO2 emissions from the transport sector requires an understanding of key factors affecting these emissions and this can also be considered as a step towards sustainable use of energy sources.

The objective of this study is to determine the factors that contribute to changes in CO2 emissions for the transport sector in France by utilising a ‘‘decomposition analysis” to determine the relative contributions of potential factors, which include (i) changes in fuel mix (ii) modal Shift (iii) Economic growth as well as changes in (iv) Emission coefficient and (v) Transportation Energy Intensity. This study covers the period 1980–2007 and analyses the changes in transport sector CO2 emissions in three different sub-periods, i.e., 1980 – 1990, 1990 – 2000 and 2000 – 2007, during which significant policy changes have been observed in the economy. This enables us to observe the effects of different macroeconomic policies on carbon dioxide emissions in the transport sector of France.

The paper is organized as follows: the next chapter presents a detailed analysis of CO2 emissions trend and potential factors driving transport sector CO2 emissions increase over the past 27 years, a brief review of empirical literature is also provided in this chapter. Chapter 3 presents the decomposition methodology and models employed in the analysis as well as sources of data. In Chapter 4, the results are presented and analysed while Chapter 5 discusses some major policy implications of the study. The final chapter presents the conclusion.

CHAPTER TWO

2.0 Background and Literature Review

2.1 Overview of Transport Sector and CO2 Emissions in France

In order to present a clearer picture of the transport sector CO2 emissions in France and the possible factors contributing to this emission growth, this chapter will examine the trend of CO2 emissions by comparing the total national emissions with emissions from the transport sector. This is followed by a discussion of key factors such as fuel mix, modal mix and transportation energy intensity.

2.1.1 Evolution of CO2 Emissions and CO2 Intensity from Energy Use in Transport Sector

The transport sector is one of the largest consumers of energy as well as one of the main sources of CO2 emissions in France. In 1980, the transportation sector accounted for 21.4% of the total energy consumption in the country and by 2007, this share increased to 28%. The relatively high share of the transport sector in the total energy consumption led this sector to be one of the sources of carbon dioxide emissions.

Figure 1a shows the growth rate of CO2 emissions for total national and transport sector in France. The data has been indexed to 100, with 1980 as the base year to allow for better comparison of the growth patterns. It shows that whilst the growth rate of total CO2 emissions in France has decreased, the emissions from the transport sector has increased, with the total CO2 emissions in France decreasing by 20% over the entire period while transport sector emissions increased by 48%. The transport sector experienced an average annual growth rate of 1.5% p.a. The average growth between 1980 and 1990 was 2.5% p.a. compared to 1.7% p.a. in the next ten years. The growth rate since 2000 appears to have slowed as emissions have decreased by 0.3% p.a.

In 1980, the transport sector accounted for more than 19% of the total national emissions in France and by 2007 the share grew to 35%. This is because most of the fossil fuel consumption in France occurs in the transport sector and CO2 emissions from the power sector are very small due to nuclear power generation.

Figure 1b shows the trend of CO2 intensity from energy use in the transport sector in France. As can be seen, CO2 intensity has decreased from 94 tons of CO2 per million Euro of economic output (1980 prices) in 1980 to 80 tons of CO2 per million Euros in 2007. However, between this time periods there has been a wide disparity in CO2 intensity for the different years.

2.1.2 Transport Sector Fuel Mix

How fuel switching occurs within a mode of transportation is another factor that elucidates transport sector CO2 emissions growth. However, fuel substitution in this sector is very limited due to lack of alternatives to fossil fuels. Figure 2 and table 2 presents the fuel mix of the transport sector in 1980, 1990, 2000 and 2007 in France. As can be seen, motor gasoline and diesel oil are the main products/fuels used in the transport sector. Kerosene type jet fuel, Liquefied Petroleum Gas (LPG) and electricity play a minor role, while the share of biogasoline and biodiesel has slightly increased to being non-existent in 1980 to 0.61% and 2.60% in 2007 respectively. The contribution for other fuel types is minimal.

The share of diesel oil in fuel consumption for transportation has increased from 34.52% in 1980 to over 69% in 2007. During the same period, the share of motor gasoline has decreased significantly from 61.25% to 21%. A comparison of the diesel oil and motor gasoline share in fuel mix during 1980 to 2007 suggests significant substitution of motor gasoline with diesel oil. Following the oil crises in the 1970s, France increased taxes on gasoline to reduce dependence on fossil fuels. According to global business insights, the major factor behind growing demand for diesel oil in France is the lower taxes on it compared with motor gasoline. Diesel price is about 20% lower than gasoline in France and diesel cars are 20% more fuel-efficient than their gasoline counterparts. The French automakers also lead the world in diesel-powered vehicle production.

Table 2 depicts the CO2 emission by fuel type in the transport sector. As expected, most of the CO2 emissions are from the combustion of diesel oil and motor gasoline. Whilst most of the emissions came from gasoline in 1980, diesel had supplanted motor gasoline as the source of the majority of the emissions from the transport sector in France in 2007. Kerosene is the next key contributor of emissions although this value is extremely small when compared to emissions from diesel and gasoline. The contribution from other products is negligible.

2.1.3 Energy Intensity of the Transport Sector

Figure 4 shows the transportation energy intensity for France over the period considered for this study. As can be seen, the transportation energy intensity which is the ratio of total fuel consumption for the transport sector in France to its gross domestic product varies considerably between 1980 and 2007.

2.1.4 Transport Sector Modal Mix

One possible factor increasing transport sector CO2 emissions could be increased dependence on emission intensive modes of transportation such as commercial planes and private road vehicles. However, modal mix data in terms of transportation services is not available for the period considered in this study. Hence such information will not be useful in the decomposition analysis pursued later. As a substitute, this study will be using energy consumption data as a proxy for transportation services.

Figures 5 and 6, shows the modal mix of the transport sector in terms of energy consumption and CO2 emissions. Road was the most dominant mode of transportation in France accounting for over 90% of the transport fuel consumption and CO2 emissions in 1980, 1990, 2000 and 2007. The other modes of transportation have not been as important as road. For example, in 1980 rail accounted for only 4% of the total transport fuel consumption and this share has been reduced to 2% in 2007. There has also been a decline in the share of fuel consumption and CO2 emissions from inland waterways transportation, where inland waterways went from being responsible for 3% of fuel consumption in 1980 to less than 1% in 2007.

2.3 Literature Review

A better understanding of potential factors driving CO2 emissions growth can be obtained through a decomposition analysis of these factors. Most existing studies focus on the decomposition of national CO2 emission and emission intensities. Examples include Serap et al (2009) for Turkey, Obas John Ebohon and Anthony Jekwu Ikeme (2006) for sub-Saharan African countries, Shyamal Paula and Rabindra Nath Bhattacharya (2004) for India and Kihoon Lee and Wankeun Oh (2004) for APEC countries. Other studies focus on the decomposition of power and manufacturing sector CO2 emissions and emission intensities. For example, Subhes C. Bhattacharyya and Arjaree Ussanarassamee (2004) for Thai industry, Liaskas et al (2000) for EU industry and Shrestha et al (2009) for power sector of selected countries in Asia and the Pacific.

Nonetheless, a few studies also analyse the factors affecting transport sector CO2 emissions growth. T. R. Lakshmanan and Xiaoli Han (1997) attribute the increase in the transport sector CO2 emissions in the U.S.A. between 1970 and 1991 to the growth in people’s propensity to travel, population, and gross domestic product (GDP).

Govinda R. Timilsina and Ashish Shrestha (2009) decomposed the changes in the transport sector CO2 emissions in Asia during 1980-2005 into components representing changes in per capita GDP, population growth, fuel mix, modal shift, emission coefficients and transportation energy intensity. They found that population growth, changes in per capita GDP and transportation energy intensity were the main factors driving emissions growth. Similarly, Govinda R. Timilsina and Ashish Shrestha (2009) attributed the changes in the transport sector CO2 emission in 20 Latin American and Caribbean countries during the 1980 – 2005 to changes in Transportation Energy Intensity and Economic growth.

Scholl et al (1996) analysed how activity, modal shift and modal energy intensities affected CO2 emissions from passenger transport in nine OECD countries between 1973 and 1992. They concluded that increased activity and modal shifts raised CO2 emissions.

Finally, Lu et al (2007) calculated how vehicle fuel intensity, vehicle ownership, population intensity and economic growth affected the total carbon dioxide emissions from highway vehicles in Germany, Japan, South Korea and Taiwan during 1990–2002. They came to the conclusion that economic growth and vehicle ownership were the most significant factors for the increased CO2 emissions, whereas population intensity contributed substantially to CO2 emissions reduction.

While decomposition analysis has become a thriving research area in energy, few studies are reported for the France. Taking into consideration lack of research in decomposition of factors affecting CO2 emissions in France transport sector, this study aims at filling the gap. This study focuses on the Transport sector CO2 emissions growth in France and analyses the factors contributing to this growth.

Studies such as Lin et al (2008), Obas John Ebohon and Anthony Jekwu Ikeme (2006), and D. Diakoulaki and M. Mandaraka (2007) use the refined Laspeyres method, while others such as Liu et al. (2007), Hatzigeorgiou et al., 2008HYPERLINK “http://www.sciencedirect.com/science?_ob=RedirectURL&_method=outwardLink&_partnerName=655&_targetURL=http://www.scopus.com/inward/record.url?eid=2-s2.0-38749109577&partnerID=10&rel=R3.0.0&md5=1e3fa6b09848216646e2821a0202d5f0&_acct=C000054131&_version=1&_userid=7293375&md5=628b91eb84c938aba3da20f8373686e2″View Record in ScopusHYPERLINK “http://www.sciencedirect.com/science?_ob=RedirectURL&_method=outwardLink&_partnerName=656&_targetURL=http://www.scopus.com/inward/citedby.url?eid=2-s2.0-38749109577&partnerID=10&rel=R3.0.0&md5=1e3fa6b09848216646e2821a0202d5f0&_acct=C000054131&_version=1&_userid=7293375&md5=3badfbdc7eb099677ff5dcea8b8a353f”Cited By in Scopus (2)Hatzigeorgiou et al. (2008) and Subhes C. Bhattacharyya and Arjaree Ussanarassamee (2004) use the Arithmetic Mean Divisia Index (AMDI) and the Logarithmic Mean Divisia Index (LMDI) techniques. Like Wang et al (2005) the present study utilises the LMDI approach, which, unlike the AMDI technique, gives perfect decomposition, i.e. the results do not contain an unexplained residual term, and can accommodate the occurrence of zero values in the data set. Even though the refined Laspeyres methods also have these merits, their formulae become quite complex when the number of factors surpasses three, and the linkages between the additive and multiplicative forms are not as clear-cut.