Carbon dioxide emissions in OECD service sectors: the critical role of electricity use

From the early 1970s to mid 1990s, service sector CO₂ emissions have increased significantly in OECD countries, despite marked declines in energy intensity. This development is underscored by a widespread shift from fuel use to electricity use in commercial buildings. Service sectors in countries that produce low-carbon electricity, particularly those that operate nuclear- and hydro-powered utilities, have most successfully restrained CO₂ emissions. This study analyzes the impact of activity, structure, energy intensity, fuel mix, and utility mix on carbon emissions in the service sector for 13 OECD countries, and contrasts the developments before 1990 with those afterwards. The major findings of this analysis are:

(i) Carbon emissions, which rose in 9 of the 13 countries investigated, were bolstered in every country by an expansion of floor area and service sector GDP,

(ii) Declines in energy intensity and carbon intensity lessened the magnitude of emissions increases,

(iii) Electricity's share of final energy use rose in all 13 countries, but affected carbon emissions quite differently among countries,

(iv) After 1990, energy intensity improvements applied less downward pressure on emissions, while reductions in the average carbon content of final energy restrained emissions more strongly.