Cross-country multi-sectorial LMDI decomposition of aggregate energy consumption

Although a cornerstone for development, past and current energy uses have often posed a major challenge for policy makers regarding energy planning and management. Within this context, in this paper an updated multi-sectorial cross-country assessment of energy consumption trends was undertaken, contributing to existing literature and to the public debate over policy efforts towards sustainable development of the energy sector. This cross-country assessment encompasses a set of developed and emerging countries (United Kingdom, Portugal, Brazil and China). Resorting to a Logarithmic Mean Divisia Index (LMDI), aggregate energy consumption was decomposed into three main explanatory effects: activity, structure and intensity. The major findings achieved reflect the relevance of intensity and activity effects in detriment of structural effect, since for all countries the main variations have been associated to both overall activity and intensity effect. Assessment of energy consumption trends through decomposition lens provides critical information regarding which is the dominant factor that should be focused during policy design, in order to improve overall energy consumption.This research was supported by a Marie Curie International Research Staff Exchange Scheme Fellowship within the 7th European Union Framework Programme, under project NETEP- European Brazilian Network on Energy Planning (PIRSES-GA-2013-612263)