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A Study of Energy Efficiency and Mitigation of Carbon Emission: Implication of Decomposing Energy Intensity of Manufacturing Sector in Taiwan

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  • Yu-Kai Huang

    (Department of Agricultural Economics, Texas A&M University, College Station, Texas, USA)

  • Jyh-Yih Hsu

    (Center for Industrial Development Research, National Chung Hsing University, Taichung, Taiwan)

  • Lih-Chyun Sun

    (National Policy Foundation, Taipei, Taiwan)

Abstract

This paper applies the logarithmic mean divisia index (LMDI) approach to examine aggregate energy intensity of the manufacturing sector in Taiwan from 1982 to 2014. We decompose aggregate energy intensity into three effects, which are the fuel mixed effect, the sectoral energy intensity effect, and the substructural effect. The results show that aggregate energy intensity is highly correlated with carbon intensity in Taiwan. Moreover, the aggregate energy intensity is mainly driven by sectoral energy intensity effect. The influence of the substructural effect and fuel mixed effect on improving the aggregate energy intensity has become larger in the recent years. The policy implication of study results suggests that internalizing the costs of carbon emission, creating incentives to invest energy-saving technology, establishing a fair and efficient electricity market are needed in Taiwan.

Suggested Citation

  • Yu-Kai Huang & Jyh-Yih Hsu & Lih-Chyun Sun, 2017. "A Study of Energy Efficiency and Mitigation of Carbon Emission: Implication of Decomposing Energy Intensity of Manufacturing Sector in Taiwan," International Journal of Energy Economics and Policy, Econjournals, vol. 7(2), pages 26-33.
    • Handle: RePEc:eco:journ2:2017-02-04
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    2. Kingsley Appiah & Jianguo Du & Michael Yeboah & Rhoda Appiah, 2019. "Causal relationship between Industrialization, Energy Intensity, Economic Growth and Carbon dioxide emissions: recent evidence from Uganda," International Journal of Energy Economics and Policy, Econjournals, vol. 9(2), pages 237-245.

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    More about this item

    Keywords

    Logarithmic Mean Divisia Index; Energy Intensity; Carbon Intensity; Structural Change; Fuel Mixed Effect;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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