The Relationship between Input Prices and Energy Intensity in Canadian Manufacturing Industries

Samuel F. Gamtessa

Canadian Public Policy, 2016, vol. 42, issue 4, 496-504

Abstract: This study analyses the roles that energy and other input prices play in reducing the energy intensity of manufacturing industries in Canada. I find that the average energy price elasticity of energy intensity is about −0.39 for the manufacturing sector, with a 95 percent CI of −0.43 to −0.34. The calculated average elasticities of substitutions indicate that both capital and labour are complementary with energy while both materials and services inputs are substitutes. The industry-specific estimates, however, reveal widespread differences in terms of both the magnitude of the elasticities and the patterns of the relationships among the inputs.

Date: 2016
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