The measurement of the energy intensity of manufacturing industries: a principal components analysis
Energy intensity is the ratio of energy use to output. Most industries deal with several energy sources and outputs. This leads to the usual difficulties of aggregating heterogeneous inputs and outputs. We apply principal components analysis to assess the information derived from six energy intensity indicators. We use two measures of total energy use (thermal and economic) and three measures of industry output (value added, value of production, and value of shipments). The data comes from manufacturing industries in Québec, Ontario, Alberta, and British Columbia from 1976 to 1996. We find that the variation of the six energy intensity indicators that is accounted for by the first principal component is quite large. However, depending on how variables are measured, there may be significant differences in the assessment of the evolution of energy intensity for some industries. There are no particular patterns in this respect. This makes identifying benchmarks that could be used to assess future performance difficult.
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- Jean-Thomas Bernard & Pierre Cauchon, 1987. "Thermal and Economic Measures of Energy Use: Differences and Implications," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 125-135.
- Freeman, Scott L. & Niefer, Mark J. & Roop, Joseph M., 1997. "Measuring industrial energy intensity: practical issues and problems," Energy Policy, Elsevier, vol. 25(7-9), pages 703-714.
- Burtraw, Dallas & Palmer, Karen & Bharvirkar, Ranjit & Paul, Anthony, 2001. "The Effect of Allowance Allocation on the Cost of Carbon Emission Trading," Discussion Papers dp-01-30-, Resources For the Future.
- Patterson, Murray G, 1996. "What is energy efficiency? : Concepts, indicators and methodological issues," Energy Policy, Elsevier, vol. 24(5), pages 377-390, May.
- Jay Zarnikau, 1999. "A Note: Will Tomorrow's Energy Efficiency Indices Prove Useful in Economic Studies?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 139-145.
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