Accounting for Energy Intensity Across Countries: Composition, Prices and Technology

Xican Xi, Adrian Peralta-Alva and Marina Tavares
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Xican Xi: International Monetary Fund and Fudan University
Adrian Peralta-Alva: International Monetary Fund

No 1531, 2017 Meeting Papers from Society for Economic Dynamics

Abstract: Energy is an important production input and also the largest source of greenhouse gas emissions. Reducing energy use per unit output, or so-called energy intensity, is key to promote economic efficiency and to reduce greenhouse gas emissions. In this paper, we study cross-country differences in energy intensity. We document a hump-shape relation between energy intensity and income per capita across countries, which is explained by cross-country differences in energy intensity of the industrial sector and by sectoral composition. We then extend the development accounting framework to understand the cross-country differences in industrial energy intensity. We find that energy-saving technologies account for most of the differences in industrial energy intensity, while energy prices and the industrial composition play a minor role.

Date: 2017
New Economics Papers: this item is included in nep-ene and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed017:1531

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