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Decomposition of energy consumption and energy intensity in Indian manufacturing industries


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  • Binay Kumar Ray

    (Indira Gandhi Institute of Devleopment Research)

  • B. Sudhakara Reddy

    (Indira Gandhi Institute of Development Research)

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    Of the total final energy consumption in India, the industrial sector accounts for about 37 percent, of which the manufacturing sector consumes about 66 percent (2004-2005 figures) with chemicals and petrochemicals, iron and steel, pulp and paper and cement industries being the largest energy users. In the recent past, energy intensity in the manufacturing sector has been decreasing. This decline is mainly due to fuel substitution away from coal in some of the sectors, most notably cement. While industrial production in developed countries stabilizes and declines, the industrial output in the developing world continues to expand owing to rising populations and catching up on economic growth. This can result in higher energy use - energy provided primarily by the combustion of fossil fuels - and thereby higher carbon-dioxide (CO2) emissions. Using the decomposition analysis we show that most of the intensity reductions are driven purely by structural effect rather than energy intensity.

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    Bibliographic Info

    Paper provided by Indira Gandhi Institute of Development Research, Mumbai, India in its series Indira Gandhi Institute of Development Research, Mumbai Working Papers with number 2007-020.

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    Length: 33 pages
    Date of creation: Dec 2007
    Date of revision:
    Handle: RePEc:ind:igiwpp:2007-020

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    1. Ang, BW, 1994. "Decomposition of industrial energy consumption : The energy intensity approach," Energy Economics, Elsevier, Elsevier, vol. 16(3), pages 163-174, July.
    2. Lecocq, Franck & Crassous, Renaud, 2003. "International climate regime beyond 2012 - are quota allocation rules robust to uncertainty?," Policy Research Working Paper Series, The World Bank 3000, The World Bank.
    3. Ang, B. W. & Lee, S. Y., 1994. "Decomposition of industrial energy consumption : Some methodological and application issues," Energy Economics, Elsevier, Elsevier, vol. 16(2), pages 83-92, April.
    4. Boyd, Gale A. & Hanson, Donald A. & Sterner, Thomas, 1988. "Decomposition of changes in energy intensity : A comparison of the Divisia index and other methods," Energy Economics, Elsevier, Elsevier, vol. 10(4), pages 309-312, October.
    5. Choi, Ki-Hong & Ang, B. W., 2003. "Decomposition of aggregate energy intensity changes in two measures: ratio and difference," Energy Economics, Elsevier, Elsevier, vol. 25(6), pages 615-624, November.
    6. Edwards, Ron & Parikh, Ashok, 1978. "Intensities of energy usage an international and intertemporal comparison," Energy Policy, Elsevier, Elsevier, vol. 6(1), pages 66-75, March.
    7. Percebois, Jacques, 1979. "Is the concept of energy intensity meaningful?," Energy Economics, Elsevier, Elsevier, vol. 1(3), pages 148-155, July.
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    Cited by:
    1. Bishwanath Goldar, 2010. "Energy Intensity of Indian Manufacturing Firms: Effect of Energy Prices, Technology and Firm Characteristics," Working Papers id:2483, eSocialSciences.


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