A multi-fuel, multi-sector and multi-region approach to index decomposition: An application to China's energy consumption 1995-2010

Index Decomposition Analysis (IDA) has been extensively applied in studies of energy consumption and energy-related emissions. Most have focused on the impacts of industrial structural change and technology progress and a few have also looked at inter-fuel substitution. There has been no study examining spatial aspects within an IDA setting. This paper first describes an analytical framework analyzing driving forces behind a country's changing energy consumption with special highlights on the spatial dimension and then develops an IDA model to operationalize the analytical framework. The model is applied to a panel of 29 Chinese provinces over the period of 1995-2010. It is shown that the model not only captures the impact of changes of economic and human geography but also provides valuable insights and richer information on spatial variations of other contributing factors than conventional country-level analysis.