MANUFACTURING ENERGY USE IN 8 OECD COUNTRIES - DECOMPOSING THE IMPACTS OF CHANGES IN OUTPUT, INDUSTRY STRUCTURE AND ENERGY INTENSITY

This paper examines trends in manufacturing energy use in eight OECD countries, decomposing the changes that occured between 1973 and 1987 into the effects of changes in aggregate manufacturing activity, industry structure and energy intensities measured at the industry group level. While manufacturing production grew in every country except the UK, the rate of growth was variable from nation to nation. Structural change led to modest reductions in energy use in most countries, although in Norway structural change led to substantial growth in energy use. The reduction in energy intensities was strikingly uniform across all nations, ranging from 20% (Norway) to 36% (Japan) over the period of the analysis. While other studies have used Divisia decomposition techniques, we use an alternative method based on Laspeyres indices. A comparison of the two techniques shows that they yield closely similar empirical results, although the Laspeyres approach is more easily interpreted. While the interactions between changes in structure and intensity are arbitrarily assigned to the two factors by the Divisia approach, the Lapeyres method yields interaction terms that explicitly account for such effects. © 1991.