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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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More papers in 2017 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
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