Decomposition analysis of the change of energy intensity of manufacturing industries in Thailand

The study computes and analyses the sources of the change of energy intensity of the manufacturing industries in Thailand during the period (1991-2011) using the decomposition method. The Logarithmic Mean Divisia Index is computed and the results show that the energy intensity in the period (1991-2000) increased greatly from the increased energy intensity of each industry. In the more recent period (2000-2011) the energy intensity declined a little. However the decline was mainly from the structural change effect with negligible contribution from decreased energy intensity of each industry. The findings imply the need to balance industrial restructuring policies with efforts to reduce energy intensity for a sustainable economic development. Besides, there is much room for individual industries to improve their energy efficiency. Policies on restructuring energy prices and other non-price related measures should be devised to induce individual industries, particularly the highly energy intensive ones, to reduce their energy intensity.