Decomposition of Energy Intensity in Iranian Economic Sectors with Emphasis on Scale Effect and Consumption Pattern

Document Type : Original Article


1 MA in Economic Development and Planning, Faculty of Economics, Allameh Tabataba'i University, Tehran, Iran

2 Associate Professor of Energy Economics, Faculty of Economics, Allameh Tabataba'i University, Tehran, Iran

3 Professor of the Faculty of Economics, Faculty of Economics, Allameh Tabataba'i University, Tehran. Iran


Energy has a crucial role in the economic growth and development. Meanwhile, the energy intensity index is the main index for measurement of the efficiency and productivity of energy consumption. Energy intensity index in Iran is higher than other countries and reducing the energy subsidies has not led to declining the rate of energy intensity. The importance of non-price energy policies in the process of reducing energy intensity has led to the analysis of energy intensity decomposition as a solution to identify the factors affecting the reduction of energy consumption. In this study, the energy intensity index for the period of 2001-2011 is decomposed using structural decomposition analysis into five components as energy intensity effect, technology effect, demand structure effect, consumption pattern effect and scale effect. The results show that the main effect of increasing the energy intensity is the scale effect and the lowest one is the consumption pattern effect. Furthermore, industrial sectors reveal a higher energy intensity effect.


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