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Dynamics and Determinants of Energy Intensity in the Service Sector: A Cross-Country Analysis, 1980–2005

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  • Peter Mulder

    (VU University Amsterdam)

  • Henri L.F. de Groot

    (VU University Amsterdam)

  • Birte Pfeiffer

    (German Institute of Global and Area Studies Institute for African Affairs (IAA), Hamburg, Germany)

Abstract

We present a detailed analysis of energy intensity developments across 23 service sectors in 18 OECD countries over the period 1980−2005. We find that the shift towards a service economy has contributed to lower overall energy intensity levels in the OECD, but this contribution would have been considerably larger if the service sector had realized the same degree of energy efficiency improvements as the manufacturing sector. In most OECD countries actual energy intensity levels in the service sector tend to decrease relatively slow, especially after 1995. If we control this trend for the impact of structural changes within the services sector – by means of a decomposition analysis – we find that in about one-third of the OECD countries, energy intensity levels in the service sector have increased over time. The impact of structural changes on aggregate energy i ntensity dynamics in the service sector has increased considerably after 1995, highlighting a relatively poor energy efficiency performance within a wide range of service sectors. We show that the introduction of Information and Communication Technology (ICT) plays a potentially important role here. Using spatial panel data regression analysis, we find a limited role for energy prices in explaining variation in energy productivity, casting doubt on the effectiveness of price instruments to enhance energy efficiency in the service sector. In contrast, climate conditions have a clear impact on energy productivity, especially the number of heating days.

Suggested Citation

  • Peter Mulder & Henri L.F. de Groot & Birte Pfeiffer, 2013. "Dynamics and Determinants of Energy Intensity in the Service Sector: A Cross-Country Analysis, 1980–2005," Tinbergen Institute Discussion Papers 13-175/VIII, Tinbergen Institute.
  • Handle: RePEc:tin:wpaper:20130175
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    References listed on IDEAS

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    4. Burke, Paul J. & Csereklyei, Zsuzsanna, 2016. "Understanding the energy-GDP elasticity: A sectoral approach," Energy Economics, Elsevier, vol. 58(C), pages 199-210.
    5. 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.
    6. Karimu, Amin & Brännlund, Runar & Lundgren, Tommy & Söderholm, Patrik, 2017. "Energy intensity and convergence in Swedish industry: A combined econometric and decomposition analysis," Energy Economics, Elsevier, vol. 62(C), pages 347-356.
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    8. Elliott, Robert J.R. & Sun, Puyang & Zhu, Tong, 2017. "The direct and indirect effect of urbanization on energy intensity: A province-level study for China," Energy, Elsevier, vol. 123(C), pages 677-692.
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    16. Eleni-Plousia Kosteroglou & Georgios Theriou & Dimitrios Chatzoudes, 2016. "Customer satisfaction from private utility companies: An explanatory study," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Eastern Macedonia and Thrace Institute of Technology (EMATTECH), Kavala, Greece, vol. 9(3), pages 13-23, December.
    17. Jules-Daniel Wurlod & Joëlle Noailly, 2016. "The impact of green innovation on energy intensity: an empirical analysis for 14 industrial sectors in OECD countries," CIES Research Paper series 42-2016, Centre for International Environmental Studies, The Graduate Institute.
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    22. Robert J R Elliott & Puyang Sun & Tong Zhu, 2014. "Urbanization and Energy Intensity: A Province-level Study for China," Discussion Papers 14-05, Department of Economics, University of Birmingham.
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    More about this item

    Keywords

    energy intensity; convergence; decomposition; sectoral analysis; service sector;

    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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