An Analysis of Energy Consumption in Transportation and Industrial Sectors- a Multiplicative LMDI Approach with Application to Iran

Traditionally, there have been notable differences among accounting systems for tracking economy-wide energy efficiency trends. Quite recently, attentions are directed to formal studies that can meet the need for uniformity in the design and application of such systems. Uniform systems can give us better insights into energy efficiency indicators. In this paper, the multiplicative Logarithmic Mean Divisia Index (LMDI) decomposition technique is introduced and applied in an analysis of energy use in Iran. The aim of the following investigation is to find out what causes the changes in energy use in Irans industrial and transportation sectors. The data of this work consist of final energy use over the 2001-2006 periods from annual energy balance sheets and sectorial values added from Input- Output tables over the same years. The obtained results show that energy consumption changes are determined by the activity levels. Next among the significant energy consumption determinants are structural and energy intensity impacts.