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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)

Abstract

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.

Suggested Citation

  • Binay Kumar Ray & B. Sudhakara Reddy, 2007. "Decomposition of energy consumption and energy intensity in Indian manufacturing industries," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2007-020, Indira Gandhi Institute of Development Research, Mumbai, India.
    • Handle: RePEc:ind:igiwpp:2007-020
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    Cited by:

    1. Muhammad Haseeb & Sebastian Kot & Hafezali Iqbal Hussain & Leonardus WW Mihardjo & Piotr Saługa, 2020. "Modelling the Non-Linear Energy Intensity Effect Based on a Quantile-on-Quantile Approach: The Case of Textiles Manufacturing in Asian Countries," Energies, MDPI, vol. 13(9), pages 1-19, May.
    2. Sreekanth, K.J., 2016. "Review on integrated strategies for energy policy planning and evaluation of GHG mitigation alternatives," Renewable and Sustainable Energy Reviews, Elsevier, vol. 64(C), pages 837-850.
    3. Chiang-Ching Tan & Syvester Tan, 2018. "Energy Consumption, CO2 Emissions and Economic Growth: A Causality Analysis for Malaysian Industrial Sector," International Journal of Energy Economics and Policy, Econjournals, vol. 8(4), pages 254-258.
    4. Bishwanath Goldar, 2010. "Energy Intensity of Indian Manufacturing Firms: Effect of Energy Prices, Technology and Firm Characteristics," Working Papers id:2483, eSocialSciences.
    5. Megha Jain & Simrit Kaur, 2023. "Determinants of Energy Intensity Trends in Indian Metallic Industry: A Firm-level Analysis," Vision, , vol. 27(3), pages 360-375, June.

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    More about this item

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

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