Abstract
This paper focuses on several different measures of Organisation of Economic Co-operation and Development (OECD) countries’ energy intensity levels, plots their trends, applies a number of techniques to determine whether those intensities are converging, explores the importance of that convergence, and estimates the future steady-state or long-run distribution of energy intensity for the OECD. The paper finds that OECD energy intensity typically is declining, and a number of parametric and nonparametric methods indicate a strong degree of convergence. However, convergence is conditioned on country specific factors since differences in individual energy/GDP ratios persist. These findings suggest limits to the general decline in developed country energy intensity.
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Notes
As mentioned by an anonymous reviewer, energy/electricity prices reflect prevailing technologies and regulatory practices; however, the price weighting is preferred because (1) there is no other obvious differential weighting of energy quality and (2) for each country, over time, the price weighting consistently produces the desired quality ranking, i.e., electricity greater than oil, which is greater than natural gas, which is greater than coal.
The energy data begins in 1971 for Czech Republic, Korea, Mexico, and Slovak Republic and in 1965 for Hungary.
However, the results are not materially dependent on the bandwidth selection.
There are, however, a number of stochastic convergence studies concerned with per capita carbon emissions, many of which have appeared in the journal Environmental and Resource Economics.
The two traces are essentially the same if the shorter, 1971–2006, 28-country sample is used.
The sample contains fewer countries because of the limited availability of the price data needed to construct the energy quality measure.
The CV index was recalculated without various combinations of these big movers, and the finding of sigma-convergence among OECD countries was not dependent on the inclusion/exclusion of any one or two countries (results not shown).
Those high industrial electricity intensity countries are: Australia, Canada, Finland, Luxembourg, Norway, and Sweden. All are countries whose industrial structures are skewed toward iron and steel, minerals, mining, and pulp and paper.
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Comments from an associate editor and two anonymous reviewers helped to improve the final version.
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Appendix 1
Appendix 1
Natural log of energy intensity for OECD countries from 1978-2007 using three energy measures: total primary energy supply (tpes), total final energy consumption (tfc), and one derived from an energy quality index (eq)
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Liddle, B. OECD energy intensity. Energy Efficiency 5, 583–597 (2012). https://doi.org/10.1007/s12053-012-9148-8
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DOI: https://doi.org/10.1007/s12053-012-9148-8