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The Effect of Globalisation on Energy Footprints: Disentangling the Links of Global Value Chains

Autor: Oliver Kaltenegger and Andreas Löschel and Frank Pothen
Nummer: 587, Mar 2017, pp. 36
JEL-Class: C43, C67, C82, F18, Q43

Abstract:
This paper investigates the impact of global value chains on energy footprints. Energy footprints are consumption-based indicators which record the energy used to produce a country's final demand. In order to disentangle key characteristics of global value chains and their effects on the global energy footprint, we employ structural decomposition analyses (SDA). Furthermore, the analysis combines a retrospective with a prospective SDA approach. After an analysis of the global energy footprint for the period between 1995 and 2009, we discuss three scenarios of international integration and their implications for energy footprints for the period from 2009 to 2030. Our results show that the global energy footprint has increased by 29.4 % from 1995 to 2009, and the scenarios indicate that it will increase by another 23.5 % until 2030. Economic activity is the most important driver for the increase in energy footprints. Rising final demand alone would have increased the global energy footprint by 47.0 % between 1995 and 2009. The composition of countries from where consumption and investment goods come adds another 12.6 %. Sectoral energy intensity reductions are the most important decelerator of energy use (-27.8 %). There is a substantial contribution of changing global value chains on the rise in the global energy footprint (7.5 %): Stronger backward linkages in global value chains increased the global energy footprint by 5.5 % between 1995 and 2009. Changes in the regional composition of intermediate inputs raised it by another 1.8 %. The shift of the world economy towards East Asia alone would have increased the global energy footprint by 3.0 %. The sectoral composition of global value chains, on the other hand, had a negligible effect on energy footprints.

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