World energy intensity convergence revisited: A weighted distribution dynamics approach

Abstract

The aim of this paper is to investigate the process of convergence as regards energy intensity in the case of large group countries over the period 1971–2008. In doing so, we focus on the distribution dynamics approach. The first novel aspect of this study consists in the fact that it analyses whether the convergence patterns differ when the population is taken into account, while the second one consists in investigating the convergence process in the case of total energy intensity, fossil fuel and alternative and nuclear intensity for the overall sample of countries as well as differentiating between develop and developing countries. On the one hand, our results indicate that the convergence patterns do differ once we weight the transition matrix by population, since we find more evidence against divergence. Moreover, a significant persistence is also found in the intra-distribution dynamics, which in turn influences the speed at which the steady state is achieved. On the other hand, the Kernel density estimates and the stationary distribution show that the distribution becomes at least bimodal in the former and clearly multimodal in the latter, thereby implying that convergence occurs within a group of countries. This phenomenon is present in all sources of energy examined, but in the case of alternative and nuclear intensity there are more symptoms of convergence. Developing countries converge at higher energy intensity ratios, while in the case of developed countries there are at least two convergence clubs, one in the lowest levels of energy intensity and another with higher levels of energy intensity. These results show the need to promote further energy-saving measures in the sample of countries examined.