The energy intensity of transition countries

The economies of central and eastern Europe and the former Soviet Union have traditionally been very energy intensive. Energy intensity (defined as energy use per GDP) has decreased in the course of transition, but progress has been uneven and most transition countries still use several times as much energy per unit of output as their Western peers. This paper decomposes energy data and uses panel data to identify the main factors driving improvements in energy intensity. It shows that energy prices and progress in enterprise restructuring are the two most important drivers for more efficient energy use.