Multiple calibration decomposition analysis: Energy use and carbon dioxide emissions in the Japanese economy, 1970–1995

Abstract

The purpose of this paper is to present a new approach to evaluating structural change of the economy in a multisector general equilibrium framework. The multiple calibration technique is applied to an ex post decomposition analysis of structural change between periods, enabling the distinction between price substitution and technological change to be made for each sector. This approach has the advantage of sounder microtheoretical underpinnings when compared with conventional decomposition methods. The proposed technique is empirically applied to changes in energy use and carbon dioxide (CO 2) emissions in the Japanese economy from 1970 to 1995. The results show that technological change is of great importance for curtailing energy use and CO 2 emissions in Japan. Total CO 2 emissions increased during this period primarily because of economic growth, which is represented by final demand effects. On the other hand, the effects such as technological change for labor or energy mitigated the increase in CO 2 emissions.

An Inquiry into the Sources of Change in Industrial Energy Use in the Japanese Economy: Multiple Calibration Decomposition Analysis

“…While Okushima and Tamura [13] is a comprehensive study of changes in energy use and carbon dioxide emissions in the Japanese economy from 1970 to 1995, this paper centers on the change in industrial energy use, especially energy-intensive industry, in the 1970-1990 period. This period includes two oil crises: one in 1973 and a second in 1979.…”

“…This section outlines a new decomposition methodology -the Multiple Calibration Decomposition Analysis (MCDA)-originally proposed by Okushima and Tamura [13]. The method explicitly defines two-tier constant elasticity of substitution (CES) production functions as an underlying model to separate price substitution effects from other types of technological change.…”

“…The method has clear microtheoretical foundations; then, the decomposition components can be interpreted in a theoretically meaningful way. For more details of the MCDA methodology, see Okushima and Tamura [13].…”

“…This paper proposes a new approach -the Multiple Calibration Decomposition Analysis (MCDA)-to investigate the driving forces of change in industrial energy use in the Japanese economy. The MCDA methodology was originally proposed by Okushima and Tamura [13]. The multiple calibration technique is applied to an ex post decomposition analysis of structural change between periods, enabling distinction between price substitution and technological change for each sector.…”

The Identification of Key Sector in CO2 Emissions in Production Perspective of Indonesia: An InputOutput Analysis

“…Technology plays an important role in reducing CO2 emissions in the production process. Okushima and Tamura [20] found that technological change is of great importance for curtailing energy use and CO2 emissions in Japan. They argued that CO2 emissions increased during 1970-1995 primarily because of the economic growth.…”