Decomposition and convergence analysis of industrial energy consumption in the Yangtze River Delta

Based on China’s policy of double control of energy consumption, this study adopts the Logarithmic Mean Divisia Index model to explore the potential factors driving the changes in industrial energy consumption in the Yangtze River Delta during 2005–2019. Moreover, the convergence in energy intensity is also tested with sigma, beta, and stochastic convergence methods. The results are as follows: (1) The economic output effect was the largest contributor to the increase in energy consumption, followed by the population size effect, whereas the industrial structure effect was the dominant factor in reducing energy consumption over the same period. For the four effects, the contribution of the energy intensity effect to the reduction of the total effect was greatest, occupying the overwhelming proportion of 117%. (2) The industrial energy intensity in the Yangtze River Delta exhibits varying degrees of convergence in its distribution. (3) The foreign direct investment and industrialization level make no contribution to the convergence of energy intensity. Based on obtained results, this study then provides targeted policy recommendations to effectively manage energy consumption.