Why did energy intensity fluctuate during 2000–2009?: A combination of index decomposition analysis and structural decomposition analysis

Abstract

In this paper we offer a decomposition analysis of changes in energy intensity in China for non-residential energy use. A combination of index decomposition analysis and structural decomposition analysis is conducted in this paper. Index decomposition analysis is used to decompose energy intensity changes between 2000 and 2009 into three factors: sectoral changes, subsectoral changes and technological changes as a residual variable. Of the three factors, technological change is the main reason why energy intensity, measured as energy use per GDP, fell. We also undertook a structural decomposition analysis for the period 2002–2005. We discovered that the temporary increase in energy intensity observed for 2002–2004 is caused by two factors: overcapacity and a shift towards energy-intensive products for domestic consumption and export.