Relationship between Energy Intensity and Economic Growth : New Evidence from a Multi-Country Multi-Sector Data Set
This paper revisits the relationship between energy intensity and economic growth, using a flexible piecewise linear regression model. Based on a panel data set of 137 economies during 1990-2014, the analysis identifies a threshold effect of income...
| Main Authors: | , , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/162011517329890816/Relationship-between-energy-intensity-and-economic-growth-new-evidence-from-a-multi-country-multi-sector-data-set http://hdl.handle.net/10986/29288 |
| Summary: | This paper revisits the relationship
between energy intensity and economic growth, using a
flexible piecewise linear regression model. Based on a panel
data set of 137 economies during 1990-2014, the analysis
identifies a threshold effect of income growth on energy
intensity change: although energy intensity is negatively
correlated with income growth throughout the entire sample
and study period, the declining rate significantly slows by
more than 30 percent after the level of per capita income
reaches $5,000. Based on index decomposition, the analysis
also finds that although structural change is important for
intensity levels in all countries, the efficiency effect is
more important in higher-income countries. The results
suggest that when countries move beyond lower-middle-income
levels, energy efficiency policies become far more critical
for sustaining the rate of improvement in energy efficiency. |
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