The Energy impact of changing structures in foreign trade of Denmark

Panel: Panel 1: Energy Efficiency policies, programmes and their links

Author:
Henrik Klinge Jacobsen, Risö National Laboratory

Abstract

This paper examines structural changes in foreign trade patterns and the consequences for energy intensity in Danish production using input-output techniques on Danish national account and energy data. Traditionally the energy consumption or direct and indirect Danish energy input in production is used in the measure for energy intensity. In here it is argued that global energy content of Danish production should be examined as well, and particularly when analysing energy efficiency developments across branches there could be a difference between the two energy intensity measures. Different developments of the two measures are connected to a change in foreign trade structure and the effect on energy input in branches using 1966 import shares for inputs in 1992 production is analysed. Energy efficiency measured as energy intensity of Danish production is very dependent on whether the Danish energy input or the global direct and indirect energy input is used.

For economies with a high share of basic industrial production with high energy intensity, as in some of the eastern European economies, the use of different measures for energy input has important implications for the development in energy efficiency measures. Energy efficiency in production calculated from national energy content might improve fast as the share of consumer goods industries and the service sector are increased. A global energy input measure would show a more modest decline in energy intensity as higher import shares for products produced with high direct energy content does not change the global energy input measure.

Efficiency measures are most meaningful at the disaggregated level, but if national figures are considered it is important to include national energy input in production as well as energy content in imports. A change in national energy consumption should probably be evaluated based on the global energy content in final domestic demand rather than as domestic energy consumption.