Abstract
This research investigates the changes in Malaysia's energy intensity from 1991 to 2010 using structural decomposition analysis. Energy mix,sectoral energy efficiency, production structure, final demand structure, and final demand components factors are analysed. Results show that energyintensity has increased, and the responsible factors of this change were production structure, final demand structure, and sectoral energy efficiency.Further, this increase was offset by the negative effect of the change in final demand components owing to smaller positive net exports (due to a largerincrease in imports compared with the increase in exports) plus with lower investment in 2010 compared with 1991. In addition, energy mix changealso has contributed to energy intensity decline but at a minimal extent. The prominent effect of the production structure factor can be explained bythe industrialisation occurring in the country. The economic plans, which, among others, promote several energy intensive industries, had dampenedenergy efficiency initiatives. Policy suggestions are proposed to reduce the energy intensity of Malaysia.Keywords: Energy Intensity, Energy Efficiency, Structural Decomposition Analysis, Input-output Model, MalaysiaJEL Classifications: C67, O44, Q43DOI: https://doi.org/10.32479/ijeep.7793
Highlights
The role of each country’s energy sector is becoming increasingly important
The results can be supported by the implementation of the three phases of Malaysia’s Industrial Master Plan (IMP) (i.e., IMP1: 1986-1995; IMP2: 1996-2005; IMP3: 2006-2020) which involves the period of the analysis (1991-2010)
This study examines the energy intensity change in Malaysia for the 1991-2010 period
Summary
The role of each country’s energy sector is becoming increasingly important. Energy use has indisputably enhanced the material well-being of the world’s population. As an input in a production process, energy plays a vibrant role in economic growth, and future limitations on its use would limit economic growth (Stern, 2011). The world of energy is rapidly changing and the global perspective on energy has experienced astonishing changes since the oil crisis of the 1970s. Chen et al (2016) found that, in developed and developing countries, a higher gross domestic product (GDP) gives rise to energy use. There are two major challenges of energy use: Peak oil and climate change. Energy-related carbon dioxide (CO2) are the majority of GHG emissions, mainly from the burning of fossil fuels to produce energy by power sector and emissions from industrial sector (Environmental Protection Agency, 2016)
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