Energy Efficiency Policies around the World: Review and Evaluation

2.2 Energy Efficiency Indicators

The energy efficiency indicators considered here are designed to monitor changes in energy efficiency and to allow cross-country comparisons of various energy efficiency situations. Two types of indicators are considered for the description of energy efficiency: economic and techno-economic ratios.

Economic ratios, referred to as energy intensities, are defined as ratios between energy consumption, measured in energy units - tonnes of oil equivalent/(toe) - and indicators of economic activity, measured in monetary units at constant prices (gross domestic product (GDP), value added, etc. Intensities are used each time energy efficiency is measured at a high level of aggregation, i.e. at the level of the whole economy or a sector. To make these energy intensities more comparable, they are all converted to purchasing power parities at 1995 prices and parities, unless otherwise specified (see Box 2 below).

Techno-economic ratios are calculated at a disaggregated level (by sub-sector or end-use) by relating energy consumption to an indicator of activity measured in physical terms (tonnes of steel, number of passenger-kilometres, etc.) or to a consumption unit (e.g. per vehicle, dwelling, etc.). These techno-economic ratios are called unit consumption.

To allow a meaningful comparison of energy efficiency between countries, these indicators are based on common definitions; in particular with respect to the definition of energy consumption . The indicators calculated in this study are available by country on the WEC web site (www.worldenergy.org).

Box 2: Energy intensities at purchasing power parities

GDP and value added data for all regions are converted at purchasing power parities to reflect differences in general price levels. Using purchasing power parities rates ("ppp" in short) instead of exchange rates increases the value of GDP in regions with a low cost of living, and therefore decreases their energy intensities (Figure 2.1).

Energy intensities at purchasing power parities are more relevant as they relate the energy consumption to the real level of economic activity. The use of purchasing power parities greatly improves the comparability of energy intensities between regions with different levels of economic development, as it narrows the gap between regions, compared to the use of exchange rates.
The intensities are measured at constant prices and exchange rates: therefore, the use of purchasing power parities changes the magnitude of the indicators but does not affect the trends.