An Analysis of Primary Energy Requirements and Emission Levels Using the Structural Decomposition Approach: The Spanish Case

Primary energy use in economic activities and emission of contaminants caused by physicochemical reactions in the use of energy goods go hand in hand. Using Spanish data for 1995, 2000, and 2004 we have implemented a version of the Structural Decomposition Analysis to compute the contributions coming from changes in efficiency gains, in final demand, direct and indirect input/output requirements in energy use and emissions. Additionally, we have also analysed the combined effect of these contributions over the multiplier effects. According to our findings, in both pairs of years, large contributions coming from energy efficiency gains occurred among the most energy intensive sectors. This is due not only to the observed decline in their effective consumption of primary energy use but also because of their role as “key forward sectors” that made these energy efficiency gains more effective. However, the remarkable final demand growth that has taken place during these years has increased the strength of their push effects, offsetting the contribution of these energy efficiency improvements. Finally, we show that the contribution of indirect requirements dominates the contribution of direct requirements in the majority of Energy sectors but for energy intensive sectors the opposite is found. Our findings could be useful as the basis for designing recommendations that may make energy efficiency policies more effective in themselves as well as promoting fewer emissions in relative terms.

Keywords: Structural Decomposition Analysis, Input-Output Analysis, Primary Energy Use, Emissions levels, Structural Change, Technological change, Multiplier Effects.