Eight Methods for Decomposing the Energy Intensity of China

Energy intensity is crucial to the development of a society. China experienced a dramatic decline in energy intensity from the onset of economic reform in the late 1970s. Decomposition methodology is a useful analytical tool in energy consumption and energy intensity analysis, to the best of our knowledge, no decomposition study has taken into account the price index. In this paper, we use the decomposition methods derived from economic index numbers to decompose the China´s energy intensity into structural change and efficiency change. The results show that technological change plays the dominant role in decreasing energy intensity in 1985-2005. According to research, the author suggests energy intensity reduction strategies should aim at structural adjustments and accelerate technological innovation.