Two things cause alveolar hypoventilation:
The characteristic of hypoventilation is CO2 retention (Type 2 respiratory failure). PaCO2 is inversely related to alveolar ventilation, see fig 1.
Figure 1. Relationship between PaCO2 and VA (alveolar ventilation)
Alveolar gas equation
PAO2 is the partial pressure of oxygen in alveolar air.
PIO2 is the partial pressure of oxygen in inspired air.
PACO2 is partial pressure of CO2 in alveolar air.
R is the respiratory quotient.
Almost every cause of respiratory failure might eventually cause CO2 retention because of respiratory muscle fatigue. Some conditions normally present with Type 1 respiratory failure, but when severe present with marked CO2 retention (e.g. cardiogenic pulmonary oedema). This is because of a profound V/Q mismatch.
Hypoxaemia caused by hypoventilation is easily corrected with low dose oxygen supplementation. If high dose oxygen is required, there is an additional or alternative cause of hypoxaemia.