Over the past two decades, Portugal has seen a reduction in carbon emissions by around 30 percent. To assess which factors contributed to this significant decrease, the change in carbon emissions was broken down into six determinants, namely carbon intensity, energy efficiency, production structure, demand composition, per capita demand and population.

The breakdown of the accumulated change in carbon emissions since 2000 allows us to conclude that the main factors that contributed to the reduction in emissions were the decrease in carbon intensity and the increase in energy efficiency. In particular, these two factors played a very important role in the marked reduction of carbon emissions in the second half of the 2000s. This reflected the very significant increase in the importance of renewable energy sources in energy generation, with emphasis on energy wind. In the most recent period, the decision to close the last thermoelectric power stations in Portugal also contributed. In the opposite direction, we have the role of demand whose increase over time pushes carbon emissions. In this regard, it should be noted that the very negative evolution of demand in 2020, due to the COVID-19 pandemic, reduced its accumulated contribution.

For more details see Cardoso, F. and Rua, A. (2023) “Gone with the wind: A structural decomposition of carbon emissions”, Working Paper 12, Banco de Portugal.

Prepared by Fátima Cardoso and António Rua. The analyses, opinions and findings expressed above represent the views of the authors and not necessarily those of Banco de Portugal or Eurosystem.

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