An Index Decomposition Analysis of Final and Useful Exergy Intensities of the Portuguese Economy

Energy intensity represents one of the key indicators of the sustainability of an economy. This study aims to shed light on the societal and economic drivers of energy intensity changes in Portugal between 1960 and 2014 by using a LMDI decomposition method. Previous studies for Portugal in this period have found that final energy intensity strongly decreased but, surprisingly, useful energy intensity was almost constant during the whole period. Here, we consider both productive and non-productive sectors of the economy, span a period longer than 50 years and measure energy flows in terms of final and useful exergy. Our results provide two main insights. First, we explain the rough constancy of useful exergy intensity as due to a slow industrialization process jointly with a quite delayed increase in residential exergy consumption, until 1974, during the period of highest economic growth. In this period, residential useful exergy consumption stagnated thanks to a decreasing population (due to strong emigration) and decreasing per capita private consumption under the dictatorship regime. However, we must underline that the variation of useful exergy intensity would have not been high even in the absence of these opposing effects. Second, until the end of 1990s, the structural change of the economy, due to the sustained growth of very energy intensive industrial sectors such as the non-metallic mineral industry (closely associated to construction), was offset by intra-sectoral intensity decline of most industries. On the other hand, industries related to machinery and transport equipment had no influence on this process, since most of this capital is imported and thus its energy cost is not accounted for in Portugal