Factors driving energy consumption in China: A joint decomposition approach

Understanding the driving factors behind energy consumption changes provides insights about consumption patterns and can inform targeted energy saving polices. This paper applies a joint decomposition approach, introducing an index decomposition analysis (IDA) method into a production theoretical decomposition analysis (PDA). This integrated approach decomposed energy consumption changes into eight drivers. A subsequent empirical study of China resulted in three key findings. First, regardless of the geographic area considered, potential economic development was the largest factor driving energy consumption growth. Second, the technological change effects associated with economic development and energy savings both played significant roles in reducing energy consumption. Third, the efficiency change effects of energy use and economic development were generally unable to relieve the pressure of increases in energy consumption, especially in the eastern regions.