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Energy intensity: A decomposition and counterfactual exercise for Latin American countries

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  • Jimenez, Raul
  • Mercado, Jorge

Abstract

This paper investigates trends in energy intensity over the last 40years. Based on a sample of 75 countries, it applies the Fisher Ideal Index to decompose the energy intensity into the relative contributions of energy efficiency and economic structure. Then, the determinants of these energy indexes are examined through panel data regression techniques. Special attention is lent to Latin American countries (LAC) by comparing its performance to that of a similar set of countries chosen through the synthetic control method. When analyzed by income level, energy intensity has decreased in a range between 40 and 54% in low and medium income countries respectively. Efficiency improvements drive these changes, while the structural effect does not represent a clear source of change. The regression analysis shows that per capita income, petroleum prices, fuel-energy mix, and GDP growth are main determinants of energy intensity and efficiency, while there are no clear correlations with the activity component. In the case of LAC the energy intensity decreased around 20% which could be interpreted as an under-performance. However, the counterfactual exercise suggests that LAC has closed the gap with respect to its synthetic control.

Suggested Citation

  • Jimenez, Raul & Mercado, Jorge, 2014. "Energy intensity: A decomposition and counterfactual exercise for Latin American countries," Energy Economics, Elsevier, vol. 42(C), pages 161-171.
  • Handle: RePEc:eee:eneeco:v:42:y:2014:i:c:p:161-171
    DOI: 10.1016/j.eneco.2013.12.015
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    Cited by:

    1. Atalla, Tarek & Bean, Patrick, 2017. "Determinants of energy productivity in 39 countries: An empirical investigation," Energy Economics, Elsevier, vol. 62(C), pages 217-229.
    2. Ang, B.W. & Wang, H., 2015. "Index decomposition analysis with multidimensional and multilevel energy data," Energy Economics, Elsevier, vol. 51(C), pages 67-76.
    3. Parker, Steven & Liddle, Brantley, 2016. "Energy efficiency in the manufacturing sector of the OECD: Analysis of price elasticities," Energy Economics, Elsevier, vol. 58(C), pages 38-45.
    4. repec:eee:enepol:v:107:y:2017:i:c:p:585-599 is not listed on IDEAS
    5. Filipović, Sanja & Verbič, Miroslav & Radovanović, Mirjana, 2015. "Determinants of energy intensity in the European Union: A panel data analysis," Energy, Elsevier, vol. 92(P3), pages 547-555.
    6. repec:eee:juipol:v:47:y:2017:i:c:p:58-68 is not listed on IDEAS
    7. repec:gam:jeners:v:11:y:2018:i:6:p:1489-:d:151190 is not listed on IDEAS
    8. Akbar Ullah & Karim Khan & Munazza Akhtar, 2014. "Energy Intensity: A Decomposition Exercise for Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 53(4), pages 531-549.
    9. repec:eee:rensus:v:81:y:2018:i:p2:p:2421-2430 is not listed on IDEAS
    10. Proskuryakova, L. & Kovalev, A., 2015. "Measuring energy efficiency: Is energy intensity a good evidence base?," Applied Energy, Elsevier, vol. 138(C), pages 450-459.
    11. Lima, Fátima & Nunes, Manuel Lopes & Cunha, Jorge & Lucena, André F.P., 2017. "Driving forces for aggregate energy consumption: A cross-country approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 68(P2), pages 1033-1050.
    12. Juan Wang & Tao Zhao & Xianshuo Xu & Xiaohu Zhang, 2016. "Exploring the changes of energy-related carbon intensity in China: an extended Divisia index decomposition," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 83(1), pages 501-521, August.

    More about this item

    Keywords

    Energy intensity; Decomposition; Panel data; Synthetic control method;

    JEL classification:

    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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