A Decomposition of the Energy Intensity Change in Spanish Manufacturing

The excessive consumption of energy has become a major economic and environmental concern in many countries over the last two decades. A country’s energy performance is typically proxied by the rate of aggregate energy intensity, calculated as the ratio of energy consumed to GDP. The index number decomposition analysis is the usual approach to analyze the changes in a country’s aggregate energy intensity. In this paper we analyze the energy intensity change as well as the energy efficiency change by combining the index decomposition analysis approach with non-parametric frontier efficiency methods. We apply this framework to decompose and analyze the sources of the change observed in the energy intensity of Spanish manufacturing industries during the period 1999–2007.