Decomposition of Energy Intensity in Iranian Manufacturing Sector: Divisia Index Approach

This paper tries to analyze changes in Iranian energy intensity in the manufacturing sector during 2003-2013, using the divisia index in multiplicative form. Results show that energy intensity in the manufacturing sector has not improved over this period. Energy intensity in the manufacturing sector has increased slightly accounting for structural effect and pure intensity effect as well. Energy-intensive industries have been developed because of lower energy prices. Energy saving policies of the government had less impact on energy efficiency and technology improvement. So, energy saving policies should be enforced in the manufacturing sector and an autonomous entity for implementing and supervising these policies must be established to reduce energy intensity leading to sustainable economic development and improvements in energy efficiency