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Decomposition of Energy Consumption and Decoupling Analysis in the Indonesian Industry: An Analysis of Green Industry

Author

Listed:
  • Zaekhan Zaekhan

    (Graduate Program in Economics, Faculty of Economics and Business, Universitas Indonesia, Indonesia,)

  • Nachrowi Djalal Nachrowi

    (Graduate Program in Economics, Faculty of Economics and Business, Universitas Indonesia, Indonesia,)

  • Andi Fahmi Lubis

    (Graduate Program in Economics, Faculty of Economics and Business, Universitas Indonesia, Indonesia,)

  • Widyono Soetjipto

    (Graduate Program in Economics, Faculty of Economics and Business, Universitas Indonesia, Indonesia,)

  • Tita Rosita

    (Polytechnic AKA Bogor, Ministry of Industry, Indonesia,)

  • Nona Widharosa

    (Centre for Data and Information, Ministry of Industry, Indonesia)

Abstract

This study aims to identify ways that efficiently reduce the energy consumption of the industrial sector. We use the Logarithmic Mean Divisia index (LMDI) method to measure the impact of the various driving forces of energy consumption during the period 2010-2014. We then apply the index decoupling to analyze the correlation between energy consumption and industrial growth. The findings indicate that industrial growth is a major driver of energy consumption, while reductions in energy intensity and industrial structure play an important role in limiting energy consumption. In addition, energy consumption and energy intensity follow different patterns in each sub-sector; we therefore conclude that the application of different sub-sector policies is preferred over global policies. Globally, decoupling has not been identified during the period 2010-2014, however, decoupling occurs for more detailed year periods.

Suggested Citation

  • Zaekhan Zaekhan & Nachrowi Djalal Nachrowi & Andi Fahmi Lubis & Widyono Soetjipto & Tita Rosita & Nona Widharosa, 2019. "Decomposition of Energy Consumption and Decoupling Analysis in the Indonesian Industry: An Analysis of Green Industry," International Journal of Energy Economics and Policy, Econjournals, vol. 9(5), pages 281-288.
    • Handle: RePEc:eco:journ2:2019-05-30
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    References listed on IDEAS

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    More about this item

    Keywords

    Energy consumption; LMDI; Decoupling.;
    All these keywords.

    JEL classification:

    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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