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Structural Change and Convergence of Energy Intensity across OECD Countries, 1970-2005

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  • Peter Mulder

    () (VU University Amsterdam)

  • Henri L.F. de Groot

    () (VU University Amsterdam)

Abstract

This paper uses a new dataset derived from a consistent framework of national accounts to compute and evaluate energy intensity developments across 18 OECD countries and 50 sectors over the period 1970-2005. We find that across countries energy intensity levels tend to increase in a fairly wide range of Services subsectors, but decrease in most Manufacturing sectors. A decomposition analysis reveals that changes in the sectoral composition of the economy explain a considerable and increasing part of aggregate energy intensity dynamics. A convergence analysis reveals that only after 1995 cross-country variation in aggregate energy intensity levels clearly tends to decrease, driven by a strong and robust trend break in Manufacturing and enhanced convergence in Services. Moreover, we find evidence for the hypothesis that across sectors lagging countries are catching-up with leading countries, with rates of convergence on average being higher in Services than in Manufacturing. Aggregate convergence patterns are almost exclusively caused by convergence of within-sector energy intensity levels, and not by convergence of the sectoral composition of economies. This discussion paper led to a publication in Energy Economics .

Suggested Citation

  • Peter Mulder & Henri L.F. de Groot, 2012. "Structural Change and Convergence of Energy Intensity across OECD Countries, 1970-2005," Tinbergen Institute Discussion Papers 12-027/3, Tinbergen Institute.
  • Handle: RePEc:tin:wpaper:20120027
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    More about this item

    Keywords

    Energy Intensity; Convergence; Decomposition; Sectoral Analysis;

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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