Composition of energy outflows embodied in the gross exports of the construction sector

Abstract

Energy sustainability has great importance in the development of the economy and society since energy is a necessary driving force for economic growth. The construction sector accounts for a greater percentage of global energy consumption than most other sectors. The structure of exports in the current trade pattern has affected the transmission of sectoral embodied energy through changes in regional economies. This paper uncovers the composition of productions for gross exports and examines embodied energy from the viewpoint of value added through a case study in the construction sector. Multi-regional input–output tables have been used to process the data relevant to economic trade and energy input, while the production of gross exports in 40 countries has been decomposed into the exports of value-added trade and the exports of vertical specialisation trade based on data from world input–output tables. The decomposition and reorganisation clearly show the pathways and composition in the trade activities of gross exports. The embodied energy of value-added exports accounted for 60–90% of gross exports in the construction sectors of 37 countries. The framework for sharing production in the construction sector still dominated the connections among many countries, especially the trade relationships between large economies. In the process of vertical specialisation trade, the foreign value added of the construction sector was still limited by significant events such as the global financial crisis. The construction sectors were ranked between 5 and 11 in all 35 domestic sectors in 34 countries as measured by the total export of embodied energy. So, the creation of high value added is enhanced by improvement in energy efficiency in the construction sector. However, the reduction of energy consumption in the construction sector may indirectly increase energy consumption in its upstream sectors because of the connection between exports and related production. The balance between energy consumption and creation of value added in exports is an important consideration for government supervision and sectoral development. Local construction markets need to strengthen their ability in the supply of intermediate goods, which benefits value-added exports and domestic demand. Moreover, developing national and international supply chains can positively offset the impact of the imbalanced distribution of globalised production.