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Decoupling Economic Growth and Energy Use. An Empirical Cross-Country Analysis for 10 Manufacturing Sectors

Peter Mulder () and Henri de Groot ()

No 04-005/3, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: This paper provides an empirical analysis of decoupling economic growth and energy use and its various determinants by exploring trends in energy- and labour productivity across 10 manufacturing sectors and 14 OECD countries for the period 1970-1997. We explicitly aim to trace back aggregate developments in the manufacturing sector to developments at the level of individual subsectors. A cross-country decomposition analysis reveals that in some countries structural changes contributed considerably to aggregate manufacturing energy-productivity growth and, hence, to decoupling, while in other countries they partly offset energy-efficiency improvements. In contrast, structural changes only play a minor role in explaining aggregate manufacturing labour-productivity developments. Furthermore, we find labour-productivity growth to be higher on average than energy-productivity growth. Over time, this bias towards labour-productivity growth is increasing in the aggregate manufacturing sector, while it is decreasing in most manufacturing subsectors.

Keywords: energy productivity; labour productivity; convergence; sectoral analysis (search for similar items in EconPapers)
JEL-codes: O13 O47 O5 Q43 (search for similar items in EconPapers)
Date: 2004-01-13
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