A Structural Decomposition of Energy Consumption Based on a Hybrid Rectangular Input-Output Framework: Japan's Case

This paper proposes an I-O SDA model, based on a commodity technology assumption, to identify the sources of changes in the energy demand structure, the non-energy input structure, the non-energy product-mix and the non-energy final demand of embodied energy requirements. The model contains two features. First, the hybrid rectangular input-output framework expressed in both monetary and physical terms is introduced to relax the effects of different energy prices among industrial sectors on the input structure in physical terms. Second, the demand structure of the input-output system is decomposed into the structure of energy sectors and other sectors by applying the hierarchy system with feedback loops of non-energy sectors. We identify the sources of the changes in Japan's energy use structure between 1985 and 1990. The major findings are that the total energy requirement has increased, mainly because of the changes in the non-energy final demand, while the product-mix changes have opposite effects, that is, energy savings.