Decomposing the change in energy consumption in China's nonferrous metal industry: An empirical analysis based on the LMDI method

This paper explores the salient factors driving the changes in energy consumption in China's nonferrous metal industry during the 2000-2014 period. We employ the logarithmic mean Divisia index (LMDI) method to decompose the change in energy consumption into the energy structure effect (Delta E-ES), the energy intensity effect (Delta E-EI), the industrial structure effect (Delta E-S), the labour productivity effect (Delta E-G) and the industrial scale effect (Delta E-L). The main results revealed the following: (1) from 2000 to 2014, China's nonferrous metal industry's energy consumption increased by approximately 69.08 million tons of coal equivalent (tce); (2) Delta E-G increased energy consumption in all years and was the largest contributor to the increase in energy consumption (followed by Delta E-L), whereas.EEI was the dominant factor in reducing energy consumption over the same period, accounting for 104.07% of the change in the absolute value of total energy consumption; and (3) Delta E-ES and Delta E-S contributed 0.24% and 1.45% to the change, respectively. At present, the decline in Delta E-EI cannot completely offset the increases resulting from the other four effects. This paper then provides several policy recommendations based on these results.