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Energy costs in Germany and Europe: An assessment based on a (total real unit) energy cost accounting framework

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  • Kaltenegger, Oliver
  • Löschel, Andreas
  • Baikowski, Martin
  • Lingens, Jörg

Abstract

Affordable energy is one of the objectives of the EU's energy policy. This goal has been challenged by many factors influencing energy prices and costs such as developments in global energy markets, the EU ETS, and the promotion of renewables. Analysing energy costs (prices times quantity) instead of prices has the advantage of accounting for quantity adjustments. However, it does not allow for monitoring the burden that energy costs pose on firms. For this purpose, both the European Commission and the Energy Expert Commission of the German Government recommend using real unit energy costs, defined as energy costs as a fraction of value added. We develop an input-output based (real unit) energy cost accounting framework and study the trends in Germany and the EU between 1995 and 2011. We find that many of the discovered developments are not adequately represented in the political debate, especially with regard to indirect costs (via energy embodied in intermediate inputs), which are more difficult to assess. Indirect energy costs are on the rise, are larger than direct costs in many industries, are increasingly imported, and amplify the asymmetric impacts of legal exceptions available to energy-intensive industries.

Suggested Citation

  • Kaltenegger, Oliver & Löschel, Andreas & Baikowski, Martin & Lingens, Jörg, 2017. "Energy costs in Germany and Europe: An assessment based on a (total real unit) energy cost accounting framework," Energy Policy, Elsevier, vol. 104(C), pages 419-430.
  • Handle: RePEc:eee:enepol:v:104:y:2017:i:c:p:419-430
    DOI: 10.1016/j.enpol.2016.11.039
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    1. repec:eee:eneeco:v:68:y:2017:i:s1:p:148-168 is not listed on IDEAS
    2. repec:gam:jeners:v:11:y:2018:i:2:p:448-:d:132421 is not listed on IDEAS
    3. repec:eee:rensus:v:82:y:2018:i:p3:p:2834-2842 is not listed on IDEAS
    4. Kaltenegger, Oliver & Löschel, Andreas & Pothen, Frank, 2017. "The effect of globalisation on energy footprints: Disentangling the links of global value chains," Energy Economics, Elsevier, vol. 68(S1), pages 148-168.

    More about this item

    Keywords

    Input-output based (total real unit) energy cost accounting; Environmental-economic accounting; Monitoring energy transition; Direct and indirect energy costs of intermediate consumption; Real unit energy costs; Energy cost analysis;

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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