Document Type: ORIGINAL RESEARCH PAPER

Author

Fiscal Policy Agency, Ministry of Finance, Indonesia

Abstract

This study compares the energy intensity performance in Indonesia to other south-east Asia countries such as Vietnam, Thailand, Singapore, The Philippines and Malaysia for the period from 1971 to 2016. For this goal, this research employs a multiplicative Log Mean Divisia Index II method and Spatial-Temporal Index Decomposition Analysis. The manufacturing sector and commercial sector played a key role in the regions economic structures that accounted for around 60% to 80% of the total economic output from 1971 to 2016. The contribution of the manufacturing sector increased quite significantly, from 8% in 1971 to a peak of around 31% in 2001, before it fell to 28% in 2016. On the other hand, the contribution of agriculture sector dropped from 49% in 1971 to approximately 17% in 2016. It is demonstrated in this research that the aggregate trend of the changes in energy intensity in these countries in the past forty-five years has been decreasing. For Indonesia, aggregate energy intensity rose steadily by an average of 3% per year from 1971 to 1999, more than doubling over this period, while from 1999 to 2001 energy intensity fell by 1% per annum on average, falling by 17% overall in 2016. Overall, in terms of structure and industry effects on aggregate energy intensity, all these countries showed a shift in industry value added to more energy-intensive industries which also offset by falling within-industry energy intensity. However, the analysis shows that both element of this trend was most pronounced in Indonesia.

Graphical Abstract

Highlights

  • This study provides a comprehensive decomposition method in energy efficiency across 6 ASEAN countries, which not only measures one dimensional analysis of period wise energy intensity, but also provides spatial and temporal decomposition approaches;
  • The period wise energy intensity decomposition analysis shows a detailed one-dimensional analysis of changes in energy intensity over time for a region/ country, which provides similarities and differences across ASEAN-6 countries energy efficiency performances;
  • The spatial temporal index decomposition analysis measures regional disparities that can simultaneously capture both temporal changes and spatial differences in energy efficiency developments within each individual country in the ASEAN-6 countries;
  • The suggested ST-IDA shows a better picture of each ASEAN-6 performance across countries over a given period and describes a multi-country performance that captures how the structural effect and the intensity effect changes over time amongst each ASEAN-6 country.

Keywords

Main Subjects

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