The Impact of Foreign Trade on the Development of Germany’s Energy Intensity during the Industrialization Phase

The development of Germany’s energy intensity of the 19th and 20th century shows a clear inverted U-shaped trend, which supports the hypothesis of the environmental Kuznets curve (EKC) of energy intensity. In this article this development will be analyzed from a consumption perspective and investigate the impact of international trade on the upswing phase of Germany’s EKC of energy intensity. It is assumed that Germany’s foreign trade played a vital role for its industrial energy consumption and that trade reinforced the rising trend of the energy intensity throughout the industrialization. The relative changes of the energy balance of trade indicate if foreign trade might have increased Germany’s energy consumption between 1880 and 1913. The increase of this balance after 1898 supports the hypothesis that trade impacted the EKC of energy intensity and that the peak might have been reached at lower levels without the reinforcing effect of foreign trade. A deeper analysis of the industrial sub-sectors indicates that the net exports of energy intensive industries influenced Germany’s rising energy intensity in the late 19th and early 20th century positively