China's Changing Energy Intensity Trend: A Decomposition Analysis

Date

2007

Authors

Ma, Chunbo
Stern, David

Journal Title

Journal ISSN

Volume Title

Publisher

Elsevier

Abstract

China experienced a dramatic decline in energy intensity from the onset of economic reform in the late 1970s until 2000, but since then the rate of decline slowed and energy intensity actually increased in 2003. Most previous studies found that most of the decline was due to technological change, but disagreed on the role of structural change. To the best of our knowledge, no decomposition study has investigated the role of inter-fuel substitution in the decline in energy intensity or the causes of the rise in energy intensity since 2000. In this paper, we use logarithmic mean Divisia index (LMDI) techniques to decompose changes in energy intensity in the period 1980-2003. We find that: (1) technological change is confirmed as the dominant contributor to the decline in energy intensity; (2) structural change at the industry and sector (sub-industry) level actually increased energy intensity over the period of 1980-2003, although the structural change at the industry level was very different in the 1980s and in the post-1990 period; (3) structural change involving shifts of production between sub-sectors, however, decreased overall energy intensity; (4) the increase in energy intensity since 2000 is explained by negative technological progress; (5) inter-fuel substitution is found to contribute little to the changes in energy intensity.

Description

Keywords

Keywords: Industrial economics; Statistics; Technology; Decomposition analysis; Energy intensity; Inter-fuel substitution; Logarithmic mean divisia index; Energy utilization; decomposition analysis; economic reform; energy market; structural change; trend analysis; China; Decomposition analysis; Energy; Inter-fuel substitution

Citation

Source

Energy Economics

Type

Journal article

Book Title

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2037-12-31