Laspeyres Decomposition of Energy Intensity in Hebei Province

Abstract

The method of Laspeyres index was used to decompose changes in energy intensity of Hebei province over the period 2005-2009. The results indicate that the technological effect has been the major factor causing the reduction of the energy intensity. The contribution of the technological progress accounts for as much as 92%, 99.11%, 72% at the area level, industry level and sub-sector level respectively. While the structural effect has also played a positive but a very minor role on the decline of energy intensity. Therefore, the main approaches to reducing energy intensity in Hebei province are to increase in R&D investment for promoting technology progress, accelerate the structure adjustment, attach great importance to the structural shift towards less energy-intensive subsectors, and enhance the supervision over important prefectures including such areas as Tangshan, Handan.