The evolution and driving forces of industrial aggregate energy intensity in China: An extended decomposition analysis

This study adopts the log-mean Divisial index (LMDI) method to decompose the changes in the industrial aggregate energy intensity (IAEI) of China into both macro and technological factors: sectoral energy intensity, industrial structure, research and development (R&D) efficiency, R&D intensity and investment intensity. Afterwards we determine the contributions of 36 industrial sub-sectors to IAEI through different factors using attribution analysis. The results show that the IAEI decreased by 38.26% from 2003 to 2015. This drop is predominantly caused by R&D efficiency (-76.01%). The sub-sectors of ferrous metals (-14.94%) and nonmetallic mineral products (13.36%) are the main contributors to the R&D efficiency effect. The sectoral energy intensity effect contributes 27.19%, mainly due to the sub-sectors of ferrous metals (15.97%) and non-ferrous metals (5.68%). The industrial structure effect also contributes to a decline of IAEI (-15.06%), of which, petroleum, coking and nuclear fuel (5.57%) and ferrous metals (4.73%) are the sub-sectors that contribute the most. Conversely, investment intensity (174.09%) and R&D intensity (52.06%) contribute to increase the IAEI, largely owing to sub-sectors of petroleum, coking and nuclear fuel processing, chemical materials and non-metallic mineral products. Our findings suggest that the combined effects of the policies implemented during the time frame of 2003 to 2015 led to a reduction in IAEI, with investment intensity being the focus of improvement. Nevertheless, different policies and measures should be put forward in different sub-sectors due to their varying degrees of adaptability and policy sensitivity.