Analysis on Changes of Energy Consumption and Intensity in Different Stages of the Taiwan Economic Development

The purpose of this article is to analyze how energy intensity and energy consumption change during development evolution in Taiwan, as well as capture decoupling relationship between energy consumption and economic growth in Taiwan, then compare the result of this article with result of EU-15.

There’re two factors from decomposing energy intensity by Logarithmic Mean Divisia Method Index (LMDI), respectively, improvement contribution from changing industrial structure - structural effect, and improvement contribution from technological progress - technological effect. The former worsened energy intensity during Energy Crisis and recent 10 years. The latter deteriorated energy intensity during Dot-com Bubble Crisis. There’re three factors from decomposing energy consumption by same approach, such as production effect, contribution from economic growth, and other two are structural effect and technological effect. The main factor influences energy consumption growth is production effect.

Decoupling empirical result shows agricultural sector experiences negative decoupling state during whole study period. Transportation sector improved gradually decoupling state in late 90s. Industrial and service sector maintain relative decoupling state during whole study period. It’s found that domestic energy price without linking with the international energy price, unreasonable tax exemption for certain industries, participated in WTO, new transportation infrastructure operated, and lack of incentive mechanism for saving energy could influence the energy intensity, energy consumption and decoupling state.