International inequality in energy intensity levels and the role of production composition and energy efficiency: An analysis of OECD countries

Abstract

This paper analyses the inequality of energy intensity levels between OECD countries, its causes and evolution. The paper develops a methodology which allows the inequality in energy consumption per capita to be decomposed into explanatory factors. It also analyses the contribution of different groups of countries to this inequality. The results show that although differences in affluence are the most significant factor in explaining inequality in energy consumption per capita, the inequality in energy intensity levels plays a prominent role in reducing the inequality in energy consumption per capita over the analysed period. The paper also develops a methodology which determines the importance of different production structures and energy efficiency of productive sectors in the differences in energy use per unit of GDP between the countries analysed. The results show that sector specialisation becomes increasingly important in explaining the inequality of energy intensity, while there is a significant trend towards the convergence of energy efficiency between countries sector by sector. This trend would explain the decreasing weight of energy intensity as an explanatory factor of the inequalities in energy consumption per capita.