Manufacturing energy use in OECD countries: decomposition of long-term trends

In this paper we examine manufacturing energy use in 13 OECD countries over the period 1971-1995. We describe changes in aggregate energy intensity us ing the Adaptive Weighting Divisia decomposition method. We contrast the de velopment in the periods after the oil price shocks of 1973 and 1979 with t he period of relatively stable energy prices after the oil price crash of 1 986. The results show that manufacturing output grew in most countries, pus hing up energy use. The share of electricity increased in almost every sect or, while there was a clear trend away from oil and coal towards natural ga s. Changes in the structure of output drove up energy use between 1973 and 1994 in some countries and down in others. Changes in energy intensities ha d a profound and downward effect on manufacturing energy use in all countri es. However, contrasting the period after oil prices fell in 1986 with earl ier years we see that for most countries the rate of energy intensity decli ne slowed slightly but did not reverse with falling prices. In a few countr ies efficiency improvements continued to have a strong effect. This suggest s that even without higher prices improvements of energy efficiency seems t o take place. (C) 2000 Published by Elsevier Science Ltd. All rights reserv ed.