Activity Sectors and Energy Intensity: Decomposition Analysis and Policy Implications for European Countries (1991–2005)

Gustavo Marrero,Francisco Ramos-Real

doi:10.3390/en6052521

Abstract

This paper studies the change in Energy Intensity (EI) of the main economic activities in the EU15 countries, which represents approximately 45% of their final energy consumption. The purpose is, first, to measure the different patterns between the countries by establishing differentiated typologies, and second, to investigate those reasons that explain the different trends by country. To attain our objective, the changes in EI are decomposed into their structural and efficiency components for EU15 countries for the period 1991–2005. Results reveal four different typologies for this set of countries, and show the importance of identifying those economic activities which, due to their special impact, are key to reducing energy consumption. The changes in the structural component are due mainly to a transformative process in which the importance of industry in the economy as a whole drops, while the opposite holds for services. However, the changes in the efficiency component do not seem to be linked to this same process. It does not appear as though the services sector resulted in a more efficient use of final energy. We have detected significant evidence of convergence for EI in the service sector that would help to understand the recent worsen evolution of EI in this sector (and in overall EI) of Southern European countries. It can also be concluded that an analysis of global EI change without distinguishing among its components can result in misleading conclusions and in improperly conceived Energy Policies.

Highlights

The European Union is positioned as one of the most active economic areas in terms of measures for combating climate change
Final energy consumption covers energy supplied to the final consumer for all energy uses, but we focus on those activity sectors commented above
We propose a procedure that will allow us to decompose the causes of the changes in energy intensity, distinguishing between those reasons solely associated with a change in the production structure and those derived from changes in the technological-energy efficiency in the final consumption

Summary

Introduction

The European Union is positioned as one of the most active economic areas in terms of measures for combating climate change. The importance of energy consumption in this issue is reflected by the fact that 80% of greenhouse gas emissions in Europe are currently due to the use and production of energy. 20/20/20 plan), by which EU member countries committed to reducing emissions and primary energy consumption in 2020 by 20% with respect to 1990 levels (see [2,3] for a description of the European environmental policy in shape with energy and emission targets for the 2020 horizon and Kyoto protocol). The different greenhouse gas emission scenarios depend largely on changes in the energy use and on the extent to which future energy sources limit their emissions of these types of contaminant. Improving energy efficiency is regarded as one of the most important options for reducing the emissions of greenhouse gases and the dependence of countries on energy imports [4]

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Conclusion