Energy prices and energy intensity in China : a structural decomposition analysis and econometrics study
Since the start of its economic reforms in 1978, China's energy prices relative to other prices have increased. At the same time, its energy intensity, i.e., energy consumption per unit of Gross Domestic Product (GDP), has declined dramatically, by about 70%, in spite of increases in energy con...
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| Other Authors: | |
| Format: | Working Paper |
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MIT Center for Energy and Environmental Policy Research
2009
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| Online Access: | http://hdl.handle.net/1721.1/45052 |
| _version_ | 1826188998684442624 |
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| author | Shi, Xiaoyu Polenske, Karen R. |
| author2 | Massachusetts Institute of Technology. Center for Energy and Environmental Policy Research. |
| author_facet | Massachusetts Institute of Technology. Center for Energy and Environmental Policy Research. Shi, Xiaoyu Polenske, Karen R. |
| author_sort | Shi, Xiaoyu |
| collection | MIT |
| description | Since the start of its economic reforms in 1978, China's energy prices relative to other prices have increased. At the same time, its energy intensity, i.e., energy consumption per unit of Gross Domestic Product (GDP), has declined dramatically, by about 70%, in spite of increases in energy consumption. Is this just a coincidence? Or does a systematic relationship exist between energy prices and energy intensity? In this study, we examine whether and how China's energy price changes affect its energy intensity trend during 1980-2002 at a macro level. We conduct the research by using two complementary economic models: the input-output-based structural decomposition analysis (SDA) and econometric regression models and by using a decomposition method of own-price elasticity of energy intensity. Findings include a negative own-price elasticity of energy intensity, a price-inducement effect on energy efficiency improvement, and a greater sensitivity (in terms of the reaction of energy intensity towards changes in energy prices) of the industry sector, compared to the overall economy. |
| first_indexed | 2024-09-23T08:07:56Z |
| format | Working Paper |
| id | mit-1721.1/45052 |
| institution | Massachusetts Institute of Technology |
| last_indexed | 2024-09-23T08:07:56Z |
| publishDate | 2009 |
| publisher | MIT Center for Energy and Environmental Policy Research |
| record_format | dspace |
| spelling | mit-1721.1/450522019-04-09T16:50:54Z Energy prices and energy intensity in China : a structural decomposition analysis and econometrics study Shi, Xiaoyu Polenske, Karen R. Massachusetts Institute of Technology. Center for Energy and Environmental Policy Research. Since the start of its economic reforms in 1978, China's energy prices relative to other prices have increased. At the same time, its energy intensity, i.e., energy consumption per unit of Gross Domestic Product (GDP), has declined dramatically, by about 70%, in spite of increases in energy consumption. Is this just a coincidence? Or does a systematic relationship exist between energy prices and energy intensity? In this study, we examine whether and how China's energy price changes affect its energy intensity trend during 1980-2002 at a macro level. We conduct the research by using two complementary economic models: the input-output-based structural decomposition analysis (SDA) and econometric regression models and by using a decomposition method of own-price elasticity of energy intensity. Findings include a negative own-price elasticity of energy intensity, a price-inducement effect on energy efficiency improvement, and a greater sensitivity (in terms of the reaction of energy intensity towards changes in energy prices) of the industry sector, compared to the overall economy. (cont.) Analysts can use these results as a starting point for China's energy and carbon emission forecasts, which they traditionally conduct in China without accounting for energy-intensity changes. In addition, policy implications may initiate new thinking about energy policies that are needed to conserve China's energy resources and reduce carbon emissions. 2009-04-03T17:07:14Z 2009-04-03T17:07:14Z 2006 Working Paper 2006-006 http://hdl.handle.net/1721.1/45052 159939972 MIT-CEEPR (Series) ; 06-006WP. 32 p application/pdf MIT Center for Energy and Environmental Policy Research |
| spellingShingle | Shi, Xiaoyu Polenske, Karen R. Energy prices and energy intensity in China : a structural decomposition analysis and econometrics study |
| title | Energy prices and energy intensity in China : a structural decomposition analysis and econometrics study |
| title_full | Energy prices and energy intensity in China : a structural decomposition analysis and econometrics study |
| title_fullStr | Energy prices and energy intensity in China : a structural decomposition analysis and econometrics study |
| title_full_unstemmed | Energy prices and energy intensity in China : a structural decomposition analysis and econometrics study |
| title_short | Energy prices and energy intensity in China : a structural decomposition analysis and econometrics study |
| title_sort | energy prices and energy intensity in china a structural decomposition analysis and econometrics study |
| url | http://hdl.handle.net/1721.1/45052 |
| work_keys_str_mv | AT shixiaoyu energypricesandenergyintensityinchinaastructuraldecompositionanalysisandeconometricsstudy AT polenskekarenr energypricesandenergyintensityinchinaastructuraldecompositionanalysisandeconometricsstudy |