Understanding energy systems change in Canada: 1. Decomposition of total energy intensity

Abstract

JEL classification: O44 C43 Q43Between 1995 and 2010, the total energy intensity (E/GDP, PJ/Gross Domestic Product in 2002$) of the Canadian economy declined by 23% or − 2.64 MJ/$. To understand why, the Logarithmic Mean Divisia Index (LMD-I) method was used to decompose a large body of government statistical data supporting the observed E/GDP decline. The analysis shows that (a) 48% (1.27 MJ/$) of the decline was associated with an inter-sector structural change in the economy (i.e. an increased contribution to the total GDP of the low energy-using commercial and institutional sector compared with the high energy-using manufacturing and heavy industry sectors); (b) 24% (0.62 MJ/$) was attributed to the impact of the Canadian GDP growing faster than population; (c) 22% (0.58 MJ/$) of the decline was associated with an overall decrease in business energy intensity. A deeper analysis of business sectors shows a positive impact of 0.4 MJ/$ from increased energy intensity in the oil and gas sector, offset by a 0.98 MJ/$ decline due to energy intensity declines in the other business sectors; (d) 6.3% (0.17 MJ/$) of the decline was associated with an improvement in the energy intensity of households, mostly from residential energy use rather than personal transportation energy use. These results provide insights for policy makers regarding those aspects of the Canadian economy that contribute to, or work against, efforts to transform energy systems toward sustainability.

Energy and carbon intensity: A study on the cross-country industrial shift from China to India and SE Asia

“…Applied on an annual time series, the formula produces the industrial output in 2005 constant US$ for 1998-2012. Following the practice of energy intensity being calculated as Joule/US$ according to international literature [58,59], the following formulas are applied for every flow that sums up the products as already shown.…”

Reconciling energy efficiency and energy intensity metrics: an integrated decomposition analysis

“…The energy intensities of the five industries in this sector range from 30 MJ/$ (mining) to 68 MJ/$ (cement) in 2010, several times higher than the overall energy intensity of the Canadian economy (8.6 MJ/$) and as much as 20-50 times higher than the energy intensities that prevail in the general manufacturing or in the commercial sectors of the economy (Torrie et al 2016). As a sector, energy intensity of these industries declined over the 1995-2010 period, sufficient to contribute −0.19 MJ/$ to the total Δ(E/GDP) ( Fig.…”

“…This study builds on the results of a first-order decomposition analysis of Canadian primary energy intensity (Torrie et al 2016) that applies the Logarithmic Mean Divisia Index (LMDI) method (Ang 2004(Ang , 2015Ang and Liu 2001;Ang et al 2010;Su and Ang 2012;Xu and Ang 2014;Ang and Wang 2015) to produce a comprehensive and internally consistent decomposition of total Δ(E/GDP) in Canada for the 1995-2010 period.…”

“…Some LMDI decomposition analyses focus on energy intensity rather than energy (Kerimray et al 2017), and this study uses the results of one such intensity decomposition analysis (Torrie et al 2016) that identifies the contributions individual sector intensity changes make to total Δ(E/GDP) of the economy. As described in more detail below, the sector intensities are subjected to further LMDI decomposition to specify the separate contributions of energy efficiency (changes in physical energy intensity) from other influences on energy intensity.…”

“…The results of a first-order decomposition analysis (Torrie et al 2016) show that 72% of the total Δ(E/GDP) was associated with intersector structural changes in the economy plus a per capita GDP impact, 2 as summarised in Fig. 2a.…”