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Bridging the gap between energy-to-GDP ratio and composite energy intensity index

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  • Ang, B.W.
  • Goh, Tian

Abstract

The energy-to-GDP ratio (EGR) is an indicator often used as a proxy for economy-wide energy efficiency in policy formulation and analysis. It is easy to compute and interpret, but its limitations as an energy efficiency indicator are also well known. Another widely used indicator is the composite energy intensity (CEI) index constructed from disaggregated energy and activity data. The CEI index is seen as a better proxy for energy efficiency but it is more difficult to construct as compared to the EGR. Countries have computed and compared the two indexes and reported their divergence in capturing energy efficiency trends. While economic structure change is one explanation for the divergence, it is not the only contributing factor and the issue has not been studied in detail. This study seeks to fill the gap. It dissects and discusses the fundamentals of the two indicators, and establishes a formal linkage between them by introducing a factor termed the “activity correction” (AC) effect. A case study is presented. The significance and policy implications of the AC effect are discussed.

Suggested Citation

  • Ang, B.W. & Goh, Tian, 2018. "Bridging the gap between energy-to-GDP ratio and composite energy intensity index," Energy Policy, Elsevier, vol. 119(C), pages 105-112.
    • Handle: RePEc:eee:enepol:v:119:y:2018:i:c:p:105-112
    DOI: 10.1016/j.enpol.2018.04.038
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    Cited by:

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    3. Romualdas Ginevičius & Yuriy Bilan & Grzegorz Kądzielawski & Miloslav Novotny & Tomasz Kośmider, 2021. "Evaluation of the Sectoral Energy Development Intensity in the Euro Area Countries," Energies, MDPI, vol. 14(17), pages 1-12, August.
    4. Goh, Tian & Ang, B.W., 2020. "Four reasons why there is so much confusion about energy efficiency," Energy Policy, Elsevier, vol. 146(C).
    5. Tan, Xiujie & Liu, Yishuang & Dong, Hanmin & Zhang, Zhan, 2022. "The effect of carbon emission trading scheme on energy efficiency: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 506-517.
    6. Yang, Xue & Xu, He & Su, Bin, 2022. "Factor decomposition for global and national aggregate energy intensity change during 2000–2014," Energy, Elsevier, vol. 254(PB).
    7. Gennady Osipov & Svetlana Karepova & Elena Chizhevskaya & Maxim Gnatyuk & Alexander Semin & Oksana Mikhayluk, 2018. "Directions To Improve The Effectiveness Of Russia s Energy Export Policy," International Journal of Energy Economics and Policy, Econjournals, vol. 8(6), pages 227-239.
    8. Velasco-Fernández, Raúl & Giampietro, Mario & Bukkens, Sandra G.F., 2018. "Analyzing the energy performance of manufacturing across levels using the end-use matrix," Energy, Elsevier, vol. 161(C), pages 559-572.
    9. Stefan Dragos Cirstea & Andreea Cirstea & Irimie Emil Popa & Gabriel Radu, 2019. "The Role of Bioenergy in Transition to a Sustainable Bioeconomy – Study on EU Countries," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 21(50), pages 1-75, February.
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    11. Su, Bin & Goh, Tian & Ang, B.W. & Ng, Tsan Sheng, 2022. "Energy consumption and energy efficiency trends in Singapore: The case of a meticulously planned city," Energy Policy, Elsevier, vol. 161(C).
    12. Alexander N. Semin & Vadim V. Ponkratov & Kirill G. Levchenko & Andrey S. Pozdnyaev & Nikolay V. Kuznetsov & Olga V. Lenkova, 2019. "Optimization Model for the Russian Electric Power Generation Structure to Reduce Energy Intensity of the Economy," International Journal of Energy Economics and Policy, Econjournals, vol. 9(3), pages 379-387.
    13. Romualdas Ginevičius & Gracjana Noga & Eigirdas Žemaitis & Barbara Piontek & Karel Šuhajda, 2021. "Comparative Assessment of the Impact of Electricity Consumption in Different Economic Sectors on the Economic Development of the EU Member States," Energies, MDPI, vol. 14(24), pages 1-14, December.
    14. Madurai Elavarasan, Rajvikram & Pugazhendhi, Rishi & Irfan, Muhammad & Mihet-Popa, Lucian & Campana, Pietro Elia & Khan, Irfan Ahmad, 2022. "A novel Sustainable Development Goal 7 composite index as the paradigm for energy sustainability assessment: A case study from Europe," Applied Energy, Elsevier, vol. 307(C).
    15. Xue-ting Jiang & Min Su & Rongrong Li, 2018. "Investigating the Factors Influencing the Decoupling of Transport-Related Carbon Emissions from Turnover Volume in China," Sustainability, MDPI, vol. 10(9), pages 1-17, August.
    16. De Rosa, Mattia & Gainsford, Kenneth & Pallonetto, Fabiano & Finn, Donal P., 2022. "Diversification, concentration and renewability of the energy supply in the European Union," Energy, Elsevier, vol. 253(C).
    17. Ali Faridzad & Mahta Ghafarian Ghadim, 2023. "CO2 intensity decomposition analysis in the Netherlands' manufacturing industry: an application of monetary and physical indicators," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(8), pages 8799-8817, August.
    18. Abdullahi Muazu & Qian Yu & Mona Alariqi, 2023. "The Impact of Renewable Energy Consumption and Economic Growth on Environmental Quality in Africa: A Threshold Regression Analysis," Energies, MDPI, vol. 16(11), pages 1-29, June.
    19. Cheng, Shulei & Fan, Wei & Chen, Jiandong & Meng, Fanxin & Liu, Gengyuan & Song, Malin & Yang, Zhifeng, 2020. "The impact of fiscal decentralization on CO2 emissions in China," Energy, Elsevier, vol. 192(C).
    20. Livas-García, A. & Bonilla, D. & Escalante Soberanis, M.A. & Bassam, A., 2019. "Projecting the energy pathway using a methodological sequence: The case of Mexico," Energy Policy, Elsevier, vol. 135(C).

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