Abstract

This paper estimates firm level energy demand and energy efficiency for 14 sectors in Swedish manufacturing using stochastic frontier analysis (SFA). We derive sector level energy demand frontiers that account for firm specific heterogeneity. Results show that there is potential to improve energy efficiency for fuel and electricity use in all sectors; energy intensity is not an appropriate proxy for energy efficiency; the EU ETS had a modest or no effect on Swedish firms' efficient use of energy during the first trading phase and the beginning of the second, indicating that the carbon permit price was too low to generate the necessary incentives for energy efficiency investments. (C) 2016 Elsevier B.V. All rights reserved.

Keywords

Energy demand; Energy efficiency; Manufacturing industry; Stochastic frontier analysis; True random effects

Published in

Resource and Energy Economics
2016, volume: 43, pages: 130-152
Publisher: ELSEVIER SCIENCE BV

Authors' information