The effect of technological changes on energy consumption in Iran: a structural decomposition analysis

Abstract

This study proposed a simple method to evaluate the effect of technological changes in sectors on energy consumption changes. Technological changes decomposed into two factors. Input substitution in sectors represents the changes in the share of each sector in total intermediate inputs used in a specific sector and changes in direct backward linkages. From the viewpoint of input supply, the TC decomposed into two factors: Changes in the structure of intermediate input supply by sectors (selling structure changes) and direct forward linkages. The proposed model is used for the decomposition of energy consumption changes in Iran during 2011–2016. The results showed that the changes in direct backward linkages and direct forward linkages coefficients helped to decline in energy consumption.

Keywords

• energy consumption
• technological change
• structural decomposition analysis