System dynamics modeling for renewable

energy and CO2 emissions: A case study of

Indonesia
Ineza, Irawan Dwi Sasongko, Joko Susilo, Maruf Effendy,
Muhammad Fudollah, Muhammad Kusmianto

Abstract
The renewable energy plays a crucial role in achieving a reduction of
greenhouse gas emissions. This paper presents a model approach of
CO2 emissions in Indonesia in the upcoming years, up to 2026. The
main goal of this work is to study in detail the way the changes in
the energy matrix will affect the CO2 emissions of the country. In
particular, we will pay special attention to the effect of a reduction of
the share of fossil energy, as well as of an improvement in the
efficiency of the fossil energy use. We have developed a system
dynamics model based on a relationship, which introduces a
feedback mechanism in the model. The main conclusion is that it is
possible to control the CO2 emissions even under a scenario of
increase of the use of renewable energy, with an improvement of the
productive sectoral structure and with the use of a more efficient
fossil fuel technology. This study offers useful lessons for developing
countries, and it could be used as a policy-making tool because it is
easily transferable to any other time period or region.
Keywords: CO2 emissions, System Dynamics, Indonesia
1. Introduction
Carbon dioxide (CO2) is naturally occurring gas fixed by
photosynthesis into organic matter. A byproduct of fossil fuel
combustion and biomass burning, it is also emitted from land use
changes and other industrial processes. It is the principal
anthropogenic greenhouse gas that affects the Earth's radiative
balance. It is the reference gas against which other greenhouse
gases are measured, thus having a Global Warming Potential of 1.
Burning of carbon-based fuels since the industrial revolution has
rapidly increased concentrations of atmospheric carbon dioxide,
increasing the rate of global warming and causing anthropogenic
climate change. It is also a major source of ocean acidification since
it dissolves in water to form carbonic acid. The addition of man-made
greenhouse gases to the Atmosphere disturbs the earth's radiative
balance. This is leading to an increase in the earth's surface
temperature and to related effects on climate, sea level rise and

world agriculture. Emissions of CO2 are from burning oil, coal and
gas for energy use, burning wood and waste materials, and from
industrial processes such as cement production. The carbon dioxide
emissions of a country are only an indicator of one greenhouse gas.
For a more complete idea of how a country influences climate
change, gases such as methane and nitrous oxide should be taken
into account. This is particularly important in agricultural economies.
Emission intensity is the average emission rate of a given pollutant
from a given source relative to the intensity of a specific activity.
Emission intensities are also used to compare the environmental
impact of different fuels or activities. The related terms - emission
factor and carbon intensity - are often used interchangeably. The
environmental effects of carbon dioxide are of significant interest.
Carbon dioxide (CO2) makes up the largest share of the greenhouse
gases contributing to global warming and climate change.
Converting all other greenhouse gases (methane (CH4), nitrous oxide
(N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur
hexafluoride (SF6)) to carbon dioxide (or CO2) equivalents makes it
possible to compare them and to determine their individual and total
contributions to global warming. The Kyoto Protocol, an
environmental agreement adopted in 1997 by many of the parties to
the United Nations Framework Convention on Climate Change
(UNFCCC), is working towards curbing CO2 emissions globally.
In Fig. 1 Indonesia CO2 emissions for the period 19802011 are
depicted (World Bank, 2011)2. These data only correspond to energy
CO2 emissions and do not include the contribution from deforestation.
Clearly, one observes an increasing trend which is related with the
growth of economic activity. This growth is due to greater prosperity
of the inhabitants and to an increase of the population. There are
multiple factors that influence the level of CO 2 emissions, such as
economic development, population growth, technological change,
resource endowments, institutional structures, transport models,
lifestyles, and international trade (Alcantara and Padilla, 2005). The
identification of the kind of sources of CO 2 emissions and of its
magnitude is essential information for economic planning and
decision makers.

Figure 1: Indonesia CO2 emissions (1980-2011). CO2 emissions are given in million
tonnes of CO2.

Renewable energy sources could play an important role in the

diversification of the energy matrix in Indonesia. In particular,
Goverment regulation establishes the conditions for selling electricity
to the national grid, which is encouraging new projects.
This paper explores the relationship between economic growth,
productive sectors, energy consumption, changes in the use of
renewable energy, improvements in the efficiency of fossil energy,
and the CO2 emissions of the country. To estimate the CO 2 emissions
in the near future we will define different scenarios.
2.
increase in oil trade in 2013, with oil import increasing by 5.9%. End
2013, China also became the worlds largest oil importer (EIA,
2014b) in reply to the steady economic growth with rapidly rising
petroleum demand. At global scale, fossil oil has always been taking
the lions share of the world total primary energy supply, but is
recently losing ground. Whereas in 2000 its share accounted 36%, it
is nowadays 31% and the share of coal increased from 23% to 29%.
Coal consumption increased globally by 2.8% in 2013, compared to
2012, using BP (2014) except for data for China in 2012 and 2013 for
which we used IEA (2014b) and NBS (2014) (see Annex A.1.1. for
details). China, with a share of 49% in global coal consumption,
continued the increase over 2013 of 3.7%, confirming the slowed
down increase in coal consumption in 2012 of 2.4% following the
large increases in coal consumption in 2010 and 2011 (9.5% in both

years). China, the worlds largest coal importer, levies import tariffs
of 3% to 6% from October 2014, to start reducing imports from
Australia and Russia (Reuters, 2014). The coal import volume is
determined, to a large extent, by the domestic and international coal
price difference. In addition, domestic use of coal produced in China
mainly in the western and northern inland provinces faces a
transportation bottleneck towards the southern coast with highest
coal demand, mainly by lacking southbound rail lines (Tu, 2011,
2012). The accuracy of Chinas coal consumption data is commonly
estimated by at about 5% to 15%, with higher uncertainties
expected regarding the data on the last 15 years. Annex A1.4
provides more details in a discussion on uncertainty. Coal
consumption in India keeps increasing at a high pace, with 7.3%.
Consumption in OECD countries increased collectively by 1.1%, with
large decreases in Europe, i.e. in Spain (31.7%), Romania (19.0%),
Italy (10.5%) and the United Kingdom (6.5%), as well as in Australia
(4.9%) and Turkey (7.7%).
Natural gas consumption increased globally by 1.1% in 2013
compared to 2012 (BP, 2014). Among countries with more than a 2%
share in the worlds natural gas consumption, the largest increases
took place in China (10.5%), Germany (6.7%), Mexico (3.9%) Saudi
Arabia (3.7%), Canada (3.2%) and the United States (2.1%). In the
European Union, after the largest decline on record (10%) in 2011,
due to warm weather, a weak economy, high gas prices and
increases in renewable electricity production, gas consumption in the
European Union did not take off again, but continued to decrease by
1.2% in 2012, mainly caused by declines in Italy (6.5%) and in the
European countries close to Russia, more in particular Lithuania
(18.5%), Hungary (16.4%), Romania (7.7%), Finland (6.9%) and
Bulgaria (3.4%).
The United States, over the past five years, saw a significant fuel
shift of 4 percentage points from coal to gas. The exploration of
shale gas increased such that the United States no longer depends
as much on fossil-fuel imports. The large decrease in CO emissions
in 2013 was mainly caused by the drop in coal consumption, in
particular in the power sector. This also shows that in countries with
sufficient reserves in power generation capacity, changes in the fuel
mix can occur relatively fast. In 2010 the United States has
overtaken the Russian Federation to become the worlds largest gas
producer, which is since 2013 produced for the largest part from
shale gas wells (IEA, 2014j) (see also Figure 2.8). As a consequence,
the United States since 2008 has relatively low natural gas prices
compared to Europe and Japan, and larger reserves of fossil fuel.
2

3. Trends in renewable energy sources

Together, renewable energy sources meet almost onefifth of global
final energy consumption, including traditional biofuels, such as fuel
wood (REN21, 2014). More than 56% of the electricity generating
capacity added globally in 2013 consisted of renewable energy. At
the end of 2013, the total in global power capacity generated from
renewable energy had exceeded 1,560 GW, up 8% from 2012,
supplying an estimated 22.1% of global electricity (16.4% in
hydropower, 2.9% in wind power and 1.8% in biomass power). Today,
at least 144 countries, two thirds of which are developing countries,
have renewable energy targets in place, up from 138 countries one
year before, and the rise of developing world support contrasts with
slackening of policy support in some European countries and the
United States. In China, new renewable capacity surpassed for the
first time new fossil fuel and nuclear energy capacity in 2013. High
levels of penetration of different forms of renewable energy meet
e.g. 33.2% of electricity demand in Denmark and 20.9% in Spain
from wind power, and 7.8% in Italy from PV in 2013 (REN21, 2014).
3.1.
Hydropower
Hydropower output was 3,782 TWh in 2013, an increase by 2.7%
compared to 2012 (down from 4.8 % in 2012) (BP, 2014). The top 5
hydropower producers in 2013 were China (24.1% share), Canada
(10.4%), Brazil (10.2%), the United States (7.2%) and the Russian
Federation (4.8%). Of the 43% increase in the hydropower output
since 2002, China accounted for more than half and Brazil for almost
9% (BP, 2014). In terms of newly installed capacity in 2013 (40 GW),
China led with 29 GW, followed by Turkey (2.9 GW), Brazil (2 GW),
Vietnam (1.3 GW), India (0.8 GW) and the Russian Federation (0.7
GW), increasing the total global capacity to about 1,000 GW (REN21,
2014).
3.2.
Wind power
Total global wind power capacity was 318 GW at the end of 2013, an
increase of more than 12.5% compared to 2012, lower than the
average of about 21% over the last 10 years (GWEC, 2014). Wind
power output was 628.2 TWh in 2013, an increase of 20.3%
compared to 2012 (BP, 2014). In 2013, most new wind power
capacity was installed in Asia (51.6%), Europe (34%) and North
America (8.7%). However, Europe still had the largest total wind
power capacity in the world, with 38.2% of the total in 2013. China,
the worlds largest wind power market, added 16,088 MW in new
wind capacity in 2013, resulting in a total of 91.4 GW installed by the
end of 2013. Wind power represented 2.6% of the total electricity

generated in China last year. India added 1,729 MW of new capacity

to reach a total of 20.2 GW. During 2013, 11,159 MW of additional
wind power was installed in the European Union, resulting in a total
capacity of 117.3 GW. Germany installed 3,238 MW of additional
capacity, the United Kingdom 1,883 MW, followed by Poland (894
MW), Sweden (724 MW), Romania (695 MW), Denmark (657 MW) and
France (631 MW). The total wind power capacity installed in the
European Union by the end of 2013, on average, produced 236.5
TWh of electricity, now meeting 8% of EU electricity demand, up
from 7% in 2012, 6.3% in 2011 and 4.8% in 2009. After its strongest
year ever in 2012 (28% increase), the United States added 1,084 MW
wind capacity in 2013, a 1.8% increase from 2012, bringing its total
wind capacity to 61.1 GW, equivalent to 5.23% of total US installed
generation capacity (GWEC, 2014).
3.3.
Solar energy
Total global solar photovoltaic (PV) capacity increased in 2013 by
39% to about 138.9 GW, and could produce, on average, 160
terawatt hours (TWh) of electricity every year (EPIA, 2014).
According to BP (2014), PV power output was 124.8 TWh in 2013, an
increase of 32.6% compared to 2012. The global total PV installed in
2013 was 38.4 GW, up from 30 GW in 2012 and was dominated by
growth in Asia (56%), led by China with 11.8 GW and Japan with 6.9
GW. By comparison, the United States and Germany installed 4.8 and
3.3 GW, respectively, and United Kingdom, Italy, Romania and
Greece each exceeded the 1 GW mark. Regarding cumulative
installed capacity, Europe is the worlds leading region, with 81.5
GW, which represents 59% of the worlds cumulative PV capacity in
2013, followed by Asia Pacific countries (40.6 GW) and North
America (13.7 GW). In Europe, PV covers 3% of the electricity
demand and 6% of the peak electricity demand (EPIA, 2014). Total
global solar heat (SH) capacity increased in 2013 by 21% to about
330 GWth (276.6 TWh); including 325.9 GWth of water collectors and
about 3.6 GWth of air collectors. China was again the leading country
with approximately 36.6 GWth newly installed capacity bringing the
country total to about 217 GWth. In 2012 Europes total operating
capacity was 30.2 GWth but the growth continued to slowdown,
Germany remained the largest installer in 2013 by adding 0.7 MWth
for a total of 12.3 GWth. The solar water heating collectors global
capacity shares of the top 10 countries in 2012 were: China 64%, the
United States 5.8%, Germany 4.2%, Turkey 3.9%, Brazil 2.1%,
Australia 1.8%, India 1.6%, Austria 1.2%, Japan 1.1% and Israel 1%
(REN21, 2014). According to Mauthner and Weiss (2013), by the end
of 2011, in China, the cumulative installed capacity, per type, was
93% in evacuated tubes and 7% in flat plate collectors, while in
1

THREE
Europe 87% was in flat plate collectors, 8% in evacuated tubes and
5% in unglazed water collectors. By comparison, the United State
had 89% in unglazed water collectors and 11% in flat plate collectors
in cumulative installed capacity.
Concentrated Solar Power (CSP) is a large-scale promising
technology, albeit with high initial capital costs. The modest growth
over the years has been driven by government support schemes.
After its record in 2012, when the total global CSP capacity increased
by more than 60% to about 2.5 GW, the growth continued in 2013 by
an addition of 0.9 GW, up 36%, to about 3.4 GW total global capacity
(REN21, 2014), most of which being concentrated in Spain and the
United States (Jager Waldau, 2013). In 2013, Spain increased the
operating capacity by 18% to a total of 2.3GW and the United Stated
added 375 MW to end the year with almost 0.9 GW. Newly installed
capacity also included 100 MW in the United Arab Emirates, 50 MW
in India and 10 MW in China. Other countries with existing CSP are
Algeria (25 MW), Morocco (20MW), Egypt (20 MW), Australia (13 MW)
and Thailand (5 MW).
3.4. Competitiveness of wind power and solar power
The competitiveness of wind and solar power is improving
considering the price evolution of these technologies. From 2008 to
2012, the wind turbine prices have decreased by 29% and prices of
PV modules have decreased by 80% (Clean Technica, 2013). In 2013,
even if the global investments in PV declined by 22% relative to the
previous year the new capacity installations increased by about 32%.
Moreover, recent cost estimates show that global levelised costs
(USD/MWh) fell about 15% between 2009 and early 2014 (REN21,
2014). This explains that while in monetary value terms the capacity
installed decreased, in capacity terms it actually increased due to
reducing prices per unit installed.
3.5. Biofuels for transport
Global biofuel production has been growing steadily from 16 billion
litres in 2000, 100 billion litres in 2011 to 113 billion litres in 2013
(IEA, 2014d). Consumption of biofuel in road transport has increased
by 2% globally in 2013. The two leading countries are the United
States with a share of 45.6% and Brazil with a share of 21.2% in
global biofuel consumption. In 2013, the EU28 as a whole had a
share of 20.8% in global total with Germany and France the largest
contributors. In the United States, the biofuel consumption in road
transport has been growing rapidly in recent years (4% in 2012 and
9% in 2013) as the share of ethanol in petrol approached the blend
wall, the practical limit of the fraction of ethanol in petrol that can
be used in most modern regular petrol-fuelled car engines; however,

continuing further this growth requires moving towards higher

ethanol blends (Oil & Gas Journal, 2014). In the European Union,
after an increase of 6% in 2012, biofuel consumption decreased by
10% in 2013, driven by large decreases in 20122013 in Germany
(10%), Italy (9%) and Spain (58%), although significant increases
have been seen in the United Kingdom (13%), Sweden (18%) and
Denmark (41%) (see Table 3.2).
Current fuel ethanol and biodiesel use represents about 3% of global
road transport fuels and could be expected to have reduced CO
emissions with a similar percentage if all biofuel had been produced
sustainably. In practice, however, net reduction in total emissions in
the biofuel production and consumption chain is between 35% and
80% (Eickhout et al., 2008; Edwards et al., 2008). These estimates
also exclude indirect emissions, such as those from additional
deforestation (Ros et al., 2010). An example of the latter is biodiesel
produced from palm oil from plantations on deforested and partly
drained peat soils. Thus, the effective reduction will be between 1%
and 2%, excluding possible indirect effects. Large uncertainty in
terms of GHG emission reductions compared to the fossil fuels is
driven by both the complexity of the biofuel pathways and the
diversity of the feedstock, nevertheless, in the near future the
advanced biofuels (lignocellulosic, algae) are expected to deliver
more environmental benefits (Carlsson and Vellei, 2013).

Recently, emission reductions in the transport sector through tax

incentives and blending mandates act as a driver for biofuel
development. If successfully implemented, global demand will be
driven by blending mandates in the European Union, the United
States, China and Brazil. In 2013, biofuels mandates were in place in
the EU28, 13 countries in North and South America, 12 in Asia and
the Pacific and 10 in Africa (Biofuels digest, 2014; GFRA, 2014), but
only the United States and the European Union have policies
targeting so-called advanced biofuels (IEA, 2014d)
4. Results and discussion
This section includes the main results of this work, which is the
estimation of CO2 emissions for the studied scenarios. For
completeness, some other projection that, indeed, correspond to
the definition of the different scenarios are also shown.
4.1. GDP and GDP per capita
The value of the GDP for the two types of considered scenarios
(BS and GDPx2) is presented in Fig. 4, where one can see that the
estimated GDP for the GDPx2 scenario will be around 196 billion
USD in 2020 (37% higher than for BS scenario). Note that the

projected GDP is not a forecast but a consequence of the

considered scenarios. Assuming an annual increase of the
population of 1.2%, the population will pass from 14.5 million in
2010 to 16.5 million in 2020, thus the GDP per capita in 2020 will
be around 12,000 USD (which is roughly the prevision that has
been considerate for the international average of GDP per capita).
In the GDPx2+GE and GDPx2+GE+EF scenarios, the GDP would be
lower with respect to the GDPx2 scenario with a reduction of about
10 billion USD in 2020 due to the promotion of renewable energy.
The connection between GDP and renewable energy is obtained
through the feedback mechanism of the model. In the
GDPx2+GE+EF scenario the reduction in the GDP in slightly
smaller (about 8 billion USD) because of the improvement in the
energy intensity. Note that the tiny deviations between the
different GDPx2 scenarios are due to the feedback mechanism
between GDP and renewable energy.
4.2. Energy consumption
Energy consumption is calculated through the product of the
energy intensity of each productive sector (EIi) and the
corresponding share of the GDP (Si) of every sector. The values of
the energy consumption for the period 2011 2020 are
represented in Fig. 5. In 2020 the BS scenario generates a demand
of 16.4 million toe, the GDPx2 scenario about 24.6 million toe
(45% higher than the BS scenario), and the GDPx2+GE scenario
generates a demand of 23.4 million toe (38% higher than the BS
scenario). These two last scenarios show the growth of the energy
consumption due to the increase of the GDP and to the changes of
the productive sectoral structure. Finally, the GDP2+GE+EF
scenario generates a demand of 20.5 million toe (only 21% higher
than in the BS scenario). It clearly shows the benefits of the
reduction of the energy intensity.

Figure 4: Ecuador GDP for the period 2011 2020. Green line corresponds to
the BS scenario, purple line to the GDPx2 scenario, blue line to the GDPx2+GE
scenario, and orange line to the GDPx2+GE+EF scenario.

The estimated values of energy consumption in each productive

sector in 2020 are shown in table 3 to illustrate the differences
between sectors.
4.3. Energy matrix and CO2 intensity
Two types of evolution of the energy matrix have been taken
into account in the calculations, in particular, for the share of fossil
energy, ES1, and its components (ES11, ES12, and ES13). In the first
case, the evolution of ES1 follows the tendency of the period 1980
2010. In the second case, a continuous drop of ES1 up to 76% in
2020 due to the doubling of the renewable energy share is
assumed. Besides, changes in the fuel use of the productive
sectoral structure have been carried out, which suppose a
reduction of the energy intensity.
A very important result is that the reduction of the global CO2int
is twofold, on one hand, it is due to the use of a more efficient
fossil fuel technology (lower CO2 intensity) and, on the other hand,
due to the reduction of the ES1 share to the energy matrix. Both
contributions are equally important. Note that the 2011 2020
period presents a reduction

10

Figure 5: Ecuador energy consumption for the period 20112020. Green line
corresponds to the BS scenario, purple line to the GDPx2 scenario, blue line to
the GDPx2+GE scenario, and orange line to the GDPx2+GE+EF scenario.

of the global CO2int from 2.7 tCO2/toe in BS scenario to 2.3 tCO2/toe

in GDPx2+GE+EF scenario. The energy matrix and the CO 2
intensity are shown in table 4.
4.4. CO2 emission
This section includes the main outcome of this work, based on
the different scenarios. Fig. 6 shows the CO 2 emissions as a
function of time for the period 2011 2020, under the four
considered scenarios. In 2020 the highest CO2 emission
corresponds to the GDPx2 scenario, while the lowest corresponds
to the BS scenario. The GDPx2+GE and GDPx2+GE+EF scenarios,
which imply the continuous growth of the GDP and the application
of attenuation measures, with a reduction of the fossil energy
contribution to the energy matrix and changes in the productive
sectoral structure, present a clear reduction of CO 2 emissions with
respect to the GDPx2 scenario. In particular, in 2020 the CO 2
emissions would reach 66 million tonnes of CO 2 in the GDPx2
scenario, and only 45 million tonnes of CO2 in the BS
Table 3: Energy consumption in ktoe by productive sector in 2020.

Scenario
BS

Sector
1
96

Sector
2
3740

11

Sector
3
92

Sector
4
3385

Secto
r5
962

GDPx2

105

5648

126

5539

GDPx2+GE

99

5354

119

5250

GDPx2+GE+
EF

101

4729

121

4885

6
132
25
125
37
106
42

Table 4: Energy matrix (in %) and CO2 intensity (in tCO2/toe).

201
0

ES11
ES12
ES13
ES2+ES3

0.65
%
0%
87.42
%
11.92
%
2.68

2020

2020

(BS,
GDPx2)
0.66%

(GDPx2+GE,
GDPx2+GE+EF)
0.66%

0%
87.26%

0%
75.89%

12.09%

23.46%

CO2
2.67
2.33
intensity
scenario. With the application of a reduction of ES1, up to 76% in
the GDPx2+GE scenario, without modifying the energy intensity,
one reaches the value of 54 million tonnes of CO2, while
implementing energy efficiency measures in the productive
sectoral structure (GDPx2+GE+EF scenario) the emissions are
reduced up to 48 million tonnes of CO2.
The BS scenario indicates a 1.5-fold increase in the CO2
emissions in 2020, relative to the year 2010, while the GDPx2
scenario gives rise to an increase of 2.1 times. This implies that
the amount of CO2 emissions in the GDPx2 scenario during 2011
2020 will be 96 million tonnes of CO 2 higher than in the BS
scenario. Scenarios where renewable energy and efficiency goals
are implemented show that it is possible to increase the GDP in a
constant way, mitigating, at the same time, the CO 2 emissions,
therefore reducing the rise of the emissions due to the higher
economic activity. In particular, the most efficient scenario
GDP2+GE+EF provides a remarkable reduction. In 2020 the CO 2
emissions will be 16.5% lower than in the GDPx2 scenario.
Furthermore, the GDP2+GE scenario generates 49 million tonnes
of CO2 more than BS scenario during the 2011 2020

12

Figure 6: Ecuador CO2 emissions for the period 2011 2020. Green line
corresponds to the BS scenario, purple line to the GDPx2 scenario, blue line to
the GDPx2+GE scenario, and orange line to the GDPx2+GE+EF scenario.

period, which supposes a reduction of 47 million tonnes of CO2 with

respect to the GDPx2 scenario. Finally, the GDP2+GE+EF scenario
generates 16 million tonnes of CO2 more than BS scenario during
the same period, which supposes a large reduction of 80 million
tonnes of CO2 with respect to the GDPx2 scenario. For further
detail see table 5.
4.5. Sensitivity analysis
In this section we will carry out a sensitivity analysis based on
the LMDI (Ang, 2005). This analysis will allow us to determine the
relative importance of each term conforming the CO2 emission
formula (1). Indeed, it is very enlightening to write down the
increase on CO2 emission relative to the value of a given period,
and to decompose it as the product of the factors corresponding to
the different driving forces that conform the CO 2 emission.
Therefore we can write (Ang, 2005),
Dtot = Dact Dstr Dint Dmix Demf

(9)

Table 5: CO2 emissions for the 2011 2020 period in the different scenarios.
Emissions are given million tonnes of CO2.

Sce

Emis
sions

Emissions (2020)/

Emiss

13

Emissi
ons

nari
o

ions

(20
20)

Emissions (2010)

(20112020)

(2011
2020)
/
Emissi
onsBS
(20112020)

where Dtot is the CO2 emission (relative to the year 2010), Dact is the
GDP term, Dstr is the structure term (the share of the different
sectors to the GDP), Dint the energy intensity term, Dmix the energy
mixing term, and Demf the emission factor term. Note that because
the emission factors, given by the IPCC, do not change over the
time, Demf = 1 all the time and therefore it will not be shown in the
tables.
Table 6: Results of the CO2 emission decomposition factors for the period 20102020.

Scenario

Dto

Dac

BS

Dstr

Din
t

Dmi
x

1.4 1.3 1.0 1.

1.
3
8
0
04
00
GDPx2
2.0 1.8 1.0 1.
1.
8
9
6
04
00
GDPx2+GE
1.7 1.7 1.0 1.
0.
2
9
6
04
87
GDPx2+GE+
1.5 1.8 1.0 0.
0.
EF
1
2
6
90
87
The LMDI analysis shows that by 2020 in the BS scenario the
CO2 emissions increase 43% (Dtot = 1.43), due to the increase of
the GDP in 38% and to the increase of the energy intensity term in
4%, while the rest of terms remain invariant. The GDPx2 scenario
presents CO2 emissions that are more than the double that in
2010. This increase is due to a growth of 89% of the GDP, 6% of
the structure term, and 4% of the energy intensity term. The
GDPx2+GE scenario only presents an increase of 72% in the
emissions. In this case, the GDP growths 79%, the structure term
6%, and the intensity term 4%, while the mixing term reduces
13%. Finally, in the GDPx2+GE+EF scenario the emissions only
increase 51%: the GDP term growths 82%, the structure term 6%,
while the energy intensity term reduces 10% and the mixing term
13%. All the coefficients are summarized in table 6 and in a
pictorial way in Fig. 7. In this figure five axes are depicted
corresponding to the five columns appearing in table 6. The value

14

of the vertical axis, Dtot, corresponds to the product of the four

remaining variables, Dact, Dstr, Dint, and Dmix.

Figure 7: Pictorial view of the CO 2 emission decomposition factors for the period
20102020.

5. Summary and conclusions

This paper presents a model based on a variation of the Kaya
Identity and on an approach of GDP formation which is supported
with the use of renewable energy. The case study is Ecuador and
covers the period 19802020. The official data set (19802010)
was used to parameterize the model, while with the second part of
the period (20112020) an estimation of different variables,
including the CO2 emissions, was carried out. To this end, the GDP
and the energy intensity have been modeled. Moreover, different
scenarios that present the evolution of the energy matrix and the
productive sectoral structure have been defined.
First, a BS scenario (baseline scenario) has been defined, in
which the variables of the model were parameterized according to
the observed tendency during the period 1980 2010, assuming
a geometric growth rate during the period 2011 2020. The
second scenario, called GDP2, is characterized by the doubling
(relative to 2010) of the GDP during the period 2011 2020 (with
the goal of reaching the estimated international average GDP per
capita in 2020). In the third scenario, called GDP2+GE scenario,
besides assuming the doubling of the GDP, we impose the

15

decreasing of the fossil energy share (ES1) up to 76%. Finally, in

the fourth one, GDP2+GE+EF scenario, we complement the
GDP2+GE scenario including changes in the productive sectoral
structure to achieve a reduction of energy intensity, which
supposes a lower CO2 intensity.
The main outcome of this work is the estimate CO 2 emissions in
2020 in each scenario. In the BS scenario this value amounts to 45
million tonnes, in the GDPx2 scenario it corresponds to 66 million
tonnes, in GDPx2+GE scenario to 54 million tonnes of CO 2, and in
the GDPx2+GE+FE scenario to 48 million tonnes of CO 2. Note that
the BS scenario corresponds to a modest GDP increase, while in
the others the GDP increases heavily. The highest emissions are
for the GDPx2 scenario where no mitigation measures are taken.
The other two scenarios show us that it is possible a sizable
reduction of the emissions, promoting the renewable energy
(GDPx2+GE scenario) and on top of that modifying the productive
sectoral structure, therefore, reducing the energy and the CO 2
intensities, as in the GDPx2+GE+EF scenario. It is worth to note
that both promotion of renewable energy and improvement of the
energy intensity are equally effective attenuating CO2 emissions.
The methodology presented in this paper is useful to estimate
the CO2 emissions of a given country and to understand the driving
forces that guide this process, such as economic growth, energy
use, energy mix structure, and fuel use in the productive sectors.
This methodology is easily transferable to other countries, regions,
and time periods. Moreover, it can be very useful as a pedagogical
tool for explaining to policymakers the possible ways to design a
policy for reducing CO2 emissions in a medium term horizon. Note
that in the present status of the model we consider a feedback
mechanism between the GDP and the energy consumption
through the influence of the renewable energy.
6. Acknowledgment
This work has been supported by the Spanish Ministerio de
Economa y Competitividad and the European regional development
fund (FEDER) under project number FIS2011-28738-C02-02, by Junta
de Andaluca under project P07-FQM-02962, and by Spanish
Consolider-Ingenio 2010 (CPANCSD2007-00042). One of the authors
(ARL) gives special thanks to the SENESCYT (Ecuador) and the AUIP
(Spain) for the institutional and financial support.
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