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Changes in energy efficiency in Australia: A decomposition of aggregate energy intensity using Logarithmic Mean Divisia approach

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  • Shahiduzzaman, Md
  • Alam, Khorshed

Abstract

This paper provides an empirical estimation of energy efficiency and other proximate factors that explain energy intensity in Australia for the period 1978-2009. The analysis is performed by decomposing the changes in energy intensity by means of energy efficiency, fuel mix and structural changes both at sectoral and sub-sectoral levels of the economy. Results show that the driving forces behind the decrease in energy intensity in Australia are efficiency effect and sectoral composition effect, where the former is found to be more prominent than the latter. Moreover, the favourable impact of the composition effect has been consistently slowed down in the recent past. A perfect positive association characterizes the relationship between energy intensity and carbon intensity in Australia. Given the trends in decomposition factors, it is necessary to boost energy efficiency further to reduce Australia’s overall contribution to energy intensity and carbon emissions in the future.

Suggested Citation

  • Shahiduzzaman, Md & Alam, Khorshed, 2012. "Changes in energy efficiency in Australia: A decomposition of aggregate energy intensity using Logarithmic Mean Divisia approach," MPRA Paper 36250, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:36250
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    Cited by:

    1. P. Fernández-González & M. Landajo & M.J. Presno, 2013. "Factors Influencing Changes In Aggregate Energy Consumption. An European Cross-Country Analysis," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 13(2), pages 18-30.
    2. Shahiduzzaman, Md & Layton, Allan, 2017. "Decomposition analysis for assessing the United States 2025 emissions target: How big is the challenge?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 67(C), pages 372-383.
    3. Raul Alberto Jimenez Mori & Jorge Enrique Mercado Díaz, 2013. "Energy Intensity: A Decomposition and Counterfactual Exercise for Latin American Countries," IDB Publications (Working Papers) 4594, Inter-American Development Bank.
    4. 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.
    5. Fernández González, P. & Presno, M.J. & Landajo, M., 2015. "Regional and sectoral attribution to percentage changes in the European Divisia carbonization index," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 1437-1452.
    6. repec:eee:energy:v:127:y:2017:i:c:p:78-88 is not listed on IDEAS
    7. repec:spr:nathaz:v:88:y:2017:i:3:d:10.1007_s11069-017-2941-0 is not listed on IDEAS
    8. Fernández González, P. & Landajo, M. & Presno, M.J., 2013. "The Divisia real energy intensity indices: Evolution and attribution of percent changes in 20 European countries from 1995 to 2010," Energy, Elsevier, vol. 58(C), pages 340-349.
    9. Gustavo A. Marrero & Francisco J. Ramos-Real, 2013. "Activity Sectors and Energy Intensity: Decomposition Analysis and Policy Implications for European Countries (1991–2005)," Energies, MDPI, Open Access Journal, vol. 6(5), pages 1-20, May.
    10. Fernández González, P. & Landajo, M. & Presno, M.J., 2014. "Multilevel LMDI decomposition of changes in aggregate energy consumption. A cross country analysis in the EU-27," Energy Policy, Elsevier, vol. 68(C), pages 576-584.
    11. Fernández González, P., 2015. "Exploring energy efficiency in several European countries. An attribution analysis of the Divisia structural change index," Applied Energy, Elsevier, vol. 137(C), pages 364-374.
    12. repec:eco:journ2:2017-02-04 is not listed on IDEAS
    13. Heidari, Hassan & Babaei Balderlou, Saharnaz & Ebrahimi Torki, Mahyar, 2016. "Energy Intensity of GDP: A Nonlinear Estimation of Determinants in Iran," MPRA Paper 79237, University Library of Munich, Germany.
    14. 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.
    15. Brizga, Janis & Feng, Kuishuang & Hubacek, Klaus, 2013. "Drivers of CO2 emissions in the former Soviet Union: A country level IPAT analysis from 1990 to 2010," Energy, Elsevier, vol. 59(C), pages 743-753.
    16. repec:spr:annopr:v:255:y:2017:i:1:d:10.1007_s10479-015-2053-8 is not listed on IDEAS
    17. 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.
    18. Lu, Qinli & Yang, Hong & Huang, Xianjin & Chuai, Xiaowei & Wu, Changyan, 2015. "Multi-sectoral decomposition in decoupling industrial growth from carbon emissions in the developed Jiangsu Province, China," Energy, Elsevier, vol. 82(C), pages 414-425.
    19. Shahiduzzaman, Md. & Layton, Allan, 2015. "Changes in CO2 emissions over business cycle recessions and expansions in the United States: A decomposition analysis," Applied Energy, Elsevier, vol. 150(C), pages 25-35.
    20. Xingpeng Chen & Guokui Wang & Xiaojia Guo & Jinxiu Fu, 2016. "An Analysis Based on SD Model for Energy-Related CO 2 Mitigation in the Chinese Household Sector," Energies, MDPI, Open Access Journal, vol. 9(12), pages 1-18, December.
    21. Shahiduzzaman, Md & Layton, Allan, 2015. "Decomposition analysis to examine Australia’s 2030 GHGs emissions target: How hard will it be to achieve?," Economic Analysis and Policy, Elsevier, vol. 48(C), pages 25-34.
    22. 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; Energy efficiency; Index decomposition analysis;

    JEL classification:

    • O56 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Oceania
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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