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An Empirical Analysis of Energy Intensity and Its Determinants at the State Level

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  • Gilbert E. Metcalf

Abstract

Aggregate energy intensity in the United States has been declining steadily since the mid-1970s and the first oil shock. Energy intensity can be reduced by improving efficiency in the use of energy or by moving away from energy-intensive activities. At the national level, I show that roughly three-quarters of the improvements in U.S. energy intensity since 1970 results from efficiency improvements. This should reduce concerns that the United States is off-shoring its carbon emissions. A state-level analysis shows that rising per capita income and higher energy prices have played an important part in lowering energy intensity. Price and income predominantly influence intensity through changes in energy efficiency rather than through changes in economic activity. In addition, the empirical analysis suggests that little policy intervention will be needed to achieve the Bush Administration goal of an 18 percent reduction in carbon intensity by the end of this decade.

Suggested Citation

  • Gilbert E. Metcalf, 2008. "An Empirical Analysis of Energy Intensity and Its Determinants at the State Level," The Energy Journal, , vol. 29(3), pages 1-26, July.
  • Handle: RePEc:sae:enejou:v:29:y:2008:i:3:p:1-26
    DOI: 10.5547/ISSN0195-6574-EJ-Vol29-No3-1
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    References listed on IDEAS

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    1. Greening, Lorna A. & Ting, Michael & Krackler, Thomas J., 2001. "Effects of changes in residential end-uses and behavior on aggregate carbon intensity: comparison of 10 OECD countries for the period 1970 through 1993," Energy Economics, Elsevier, vol. 23(2), pages 153-178, March.
    2. Greening, Lorna A., 2004. "Effects of human behavior on aggregate carbon intensity of personal transportation: comparison of 10 OECD countries for the period 1970-1993," Energy Economics, Elsevier, vol. 26(1), pages 1-30, January.
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    More about this item

    Keywords

    Energy intensity; decomposition; US; energy policy;
    All these keywords.

    JEL classification:

    • F0 - International Economics - - General

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