Interconnections between regional industrial structure and energy consumption patterns

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Yu, Xuewei
Crittenden, John C.
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The human society exerts its influence on the ecosystem through economic activities. While the robustness of an economy manifests through its industrial structure, human impact on nature is well represented by an economy's energy consumption patterns. Therefore, evaluating the industrial structure and unraveling its interconnection with energy consumption is crucial for achieving sustainable development. In this dissertation, I address the topic from several perspectives. First, I start with an exploratory analysis on the industrial structure itself, developing an easy measure, revealed comparative dependence (RCD), to compare regional dependence on sectors. Building on the RCD measure, I indirectly evaluate the economic resilience of U.S. states by quantifying their economic diversity. Second, I bring the measure for industrial structure into context with energy consumption patterns. RCD is used to characterize sector interactions, which are then used to explain the historical trend of regional energy consumption. I find that while the expansion of low energy intensity sectors does reduce energy use, these sectors' level of interaction with other sectors also plays a key role in determining energy use. As a third step, I investigate how regional structure affects an economy's response towards energy efficiency improvements, i.e., the economy-wide rebound effect. My regional computable general equilibrium (CGE) model proves that production-side energy efficiency improvement induces moderate rebound effects, while feeding back into the industrial structure by changing sectoral production scale in different directions. I also identify sectors being able to trigger different levels of energy saving and energy rebound, and explore the mechanism for their impact propagation throughout the industrial structure. This study establishes the linkage between regional industrial structure and energy consumption from different perspectives. From the scientific perspective, it improves the fundamental understanding of how industrial structure and energy consumption are intricately connected to each other. From the policy perspective, it informs policy makers of the importance of considering sector interaction when designing energy policies, as well as the effectiveness of efficiency measures in achieving energy conservation.
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