Decomposition of aggregate energy intensity changes in two measures: ratio and difference

Decomposition analysis has been popular in energy demand analysis and has been found useful in policy-related studies. Past studies include decomposition of changes of an aggregate indicator, measured in terms of either ratios or differences, into several pre-defined contributing factors. Aggregate indicators that are often studied include total national energy demand, energy demand in specific consuming sectors, aggregate energy intensity and energy-related carbon dioxide emissions. However, the possible linkages between the ratio measure and the difference measure, including their decomposition results, have seldom been analysed. This paper examines this issue using the Divisia decomposition technique and a unique pair of decomposition formulae. Numerical examples based on Singapore and Taiwan industrial electricity demand data are presented. (C) 2003 Elsevier Science B.V. All rights reserved.