Decoupling Economic Growth and Energy Use: An Empirical Cross-Country Analysis for 10 Manufacturing Sectors
Tinbergen Institute Discussion Paper No. 04-005/3
41 Pages Posted: 25 Jun 2004
Date Written: January 2004
Abstract
This paper provides an empirical analysis of decoupling economic growth and energy use and its various determinants by exploring trends in energy - and labour productivity across 10 manufacturing sectors and 14 OECD countries for the period 1970-1997. We explicitly aim to trace back aggregate developments in the manufacturing sector to developments at the level of individual subsectors. A cross-country decomposition analysis reveals that in some countries structural changes contributed considerably to aggregate manufacturing energy-productivity growth and, hence, to decoupling, while in other countries they partly offset energy-efficiency improvements. In contrast, structural changes only play a minor role in explaining aggregate manufacturing labour-productivity developments. Furthermore, we find labour-productivity growth to be higher on average than energy-productivity growth. Over time, this bias towards labour-productivity growth is increasing in the aggregate manufacturing sector, while it is decreasing in most manufacturing subsectors.
Keywords: Energy productivity, labour productivity, convergence, sectoral analysis
JEL Classification: O13, O47, O5, Q4
Suggested Citation: Suggested Citation
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