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Relationship between energy intensity and economic growth : new evidence from a multi-country multi-sector data set

Author

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  • Deichmann,Uwe
  • Reuter,Anna
  • Vollmer,Sebastian
  • Zhang,Fan

Abstract

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.

Suggested Citation

  • Deichmann,Uwe & Reuter,Anna & Vollmer,Sebastian & Zhang,Fan, 2018. "Relationship between energy intensity and economic growth : new evidence from a multi-country multi-sector data set," Policy Research Working Paper Series 8322, The World Bank.
    • Handle: RePEc:wbk:wbrwps:8322
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    File URL: http://documents.worldbank.org/curated/en/162011517329890816/pdf/WPS8322.pdf
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    Citations

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    Cited by:

    1. Oyewole, Oluwatomisin J. & Al-Faryan, Mamdouh Abdulaziz Saleh & Adekoya, Oluwasegun B. & Oliyide, Johnson A., 2024. "Energy efficiency, financial inclusion, and socio-economic outcomes: Evidence across advanced, emerging, and developing countries," Energy, Elsevier, vol. 289(C).
    2. Paulína Šujanová & Monika Rychtáriková & Tiago Sotto Mayor & Affan Hyder, 2019. "A Healthy, Energy-Efficient and Comfortable Indoor Environment, a Review," Energies, MDPI, vol. 12(8), pages 1-37, April.
    3. Nurlan Kurmanov & Ulukbek Aliyev & Aizhan Satbayeva & Gulmira Kabdullina & Darkhan Baxultanov, 2020. "Energy Intensity of Kazakhstan s GDP: Factors for its Decrease in a Resource-export Developing Economy," International Journal of Energy Economics and Policy, Econjournals, vol. 10(5), pages 447-453.
    4. Shrestha, Anil & Mustafa, Andy Ali & Htike, Myo Myo & You, Vithyea & Kakinaka, Makoto, 2022. "Evolution of energy mix in emerging countries: Modern renewable energy, traditional renewable energy, and non-renewable energy," Renewable Energy, Elsevier, vol. 199(C), pages 419-432.
    5. Tahir Mahmood & Shafqut Ullah & Muhammad Mumtaz, 2021. "Dependence of Energy Intensity on Economic Growth: Panel Data Analysis of South Asian Economies," International Journal of Energy Economics and Policy, Econjournals, vol. 11(2), pages 234-239.
    6. Magdalena Ziolo & Sandra Jednak & Gordana Savić & Dragana Kragulj, 2020. "Link between Energy Efficiency and Sustainable Economic and Financial Development in OECD Countries," Energies, MDPI, vol. 13(22), pages 1-28, November.
    7. Sarwar, Suleman, 2022. "Impact of energy intensity, green economy and blue economy to achieve sustainable economic growth in GCC countries: Does Saudi Vision 2030 matters to GCC countries," Renewable Energy, Elsevier, vol. 191(C), pages 30-46.
    8. Malanima, Paolo, 2021. "Energy, productivity and structural growth. The last two centuries," Structural Change and Economic Dynamics, Elsevier, vol. 58(C), pages 54-65.
    9. Waheed, Rida & Sarwar, Suleman & Alsaggaf, Majid Ibrahim, 2023. "Relevance of energy, green and blue factors to achieve sustainable economic growth: Empirical study of Saudi Arabia," Technological Forecasting and Social Change, Elsevier, vol. 187(C).

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