Designing effective climate policy: Sectoral approaches to energy-related carbon reduction strategies

Abstract

Aggregate emission reductions can conceal a redistribution of climate-policy burdens across sectors. This study reanalyses published EU27 Kaya indices and sectoral emission shares for 1990-2022 to ask whether economic-environmental decoupling has been accompanied by a shift toward harder-to-abate activities. The extension introduces five complementary indicators: log-change contribution accounting, mitigation-to-growth leverage, decoupling elasticity, a sectoral reallocation index, and concentration and entropy measures. Per-capita GDP increased by 44.6%, while the combined effects of lower energy and carbon intensity outweighed the scale effect by a factor of 2.50. Per-capita CO₂ emissions consequently fell by 42.5%. At the same time, 20 percentage points of the emissions distribution were reallocated among sectors. Transport, residential, and agriculture/waste increased their combined share from 31% to 51%, while the Herfindahl-Hirschman Index fell from 0.289 to 0.237, indicating a more dispersed and institutionally complex mitigation burden. The findings show that successful aggregate decoupling does not eliminate sectoral lock-in. EU climate policy must preserve power-sector momentum while strengthening coordinated, sector-specific instruments for mobility, buildings, industry, and non-CO₂ agricultural emissions.