Disaggregated analysis of US energy consumption in the 1990s: evidence of the effects of the internet and rapid economic growth

This paper decomposes US energy use from 1988 to 1998 and attributes the changes in energy use to three underlying factors: activity, structure, and intensity. For this study we use a bottom-up methodology, by separately decomposing delivered energy use in six sectors: travel, freight, manufacturing industries, non-manufacturing industries, residential, and services. The most commonly used indicator of energy efficiency in the total economy, the ratio of energy consumed to unit of GDP (E/GDP) created can often be misleading. The rapid decline in the E/GDP ratio in recent years has been used to support assertions that the internet and information technologies in general have enabled improvements in energy efficiencies. However, our disaggregate analysis suggests that energy intensities on average are falling more slowly than ever before while actual energy use increased faster than at any time since 1970. The decline in the E/GDP ratio in the mid- to late 1990s owes much more to structural changes in the demand for energy services than to falling energy intensities.