Price Mechanism and Energy Efficiency: Evidence from ten countries

Abstract

Energy efficiency improvement is an eternal topic in the limited energy sources world. This paper analyzes the relationship between energy efficiency and energy price by using the panel data from ten economic giant. The results show that increasing energy price can promote energy efficiency improvement. If the energy price increases 10%, the energy intensity per unit of GDP could reduce 1%. Compared with other economic giant, the energy price of China is obvious low which is the main reason of China's low energy efficiency. This paper argues that increasing energy related taxes is necessary for improving energy efficiency.