What drives carbon emissions in German manufacturing: Scale, technique or composition?

Abstract

Carbon emissions from German manufacturing have increased over the past decade, while carbon intensity (emissions per Euro of gross output) has declined only slightly. We decompose changes in emissions between 2005 and 2017 into scale, composition (changes in the mix of goods produced) and technology (emission factors of production) effects. We find evidence that the production composition in the German manufacturing sector is increasingly shifting towards less carbonintensive products. However, we also find evidence to suggest that the energy intensity of production has increased. These results are largely driven by a few energy intensive sectors