In this study, an extended structural change model is adopted to explore the mechanisms of how structural adjustments influence the changes of energy intensity. Through adding an energy production sector to the standard model, we find that the change of sectoral energy intensity is determined by the differences of sectoral and energy production technologies. Moreover, the change of economy-wide energy intensity is shaped by both structural and sectoral energy intensity changes. According to theoretical findings and simulation exercises, structural change, initiated by technological growth rate and substitution elasticity, affects the growth rate of economy-wide energy intensity. (1) If the energy threshold technological growth rates are high or low enough, the overall energy intensity will develop monotonically. (2) If the energy threshold technological growth rate is moderate, and (i) substitution elasticity and initial final production technological growth rate meet some requirements, the economy-wide energy intensity will grow monotonically; otherwise, (ii) with the suitable combination of substitution elasticity and initial final production technological growth rate, the overall energy intensity can develop nonmonotonically, like U or inverted-U curves.

Historical experience shows that the economy-wide energy intensity develops nonmonotonically like an inverted U, which still lacks direct theoretical explanations. Based on a model of structural change driven by technological differences, this paper provides an attempt to explore the underlying mechanisms of energy intensity change and thus to explain the above empirical regularity accompanied by structural transformation, through introducing a nested constant elasticity of substitution production function with heterogeneous elasticities of substitution. According to some reasonable assumptions, this extended model not only describes the typical path of structural change but also depicts the inverted-U development of economy-wide energy intensity. With the availability of Swedish historical data, we take calibration and simulation exercises which confirm the theoretical predictions. Furthermore, we find that: (1) elasticities of substitution may affect the shapes and peak periods of the inverted-U curves, which can explain to a certain extent the heterogeneous transitions of economy-wide energy intensity developments in different economies; and (2) over long periods of time, the economy-wide energy intensity determined by the initial industrial structure and sectoral energy intensity tends to grow upward, while structure change among sectors provides a driving force on reshaping this trend and turning it downward.

A series of systematic changes have occurred in the areas of growth rate, economic structure, and growth engine in China’s economic “new normal” stage. This study aims to evaluate how these systematic changes affect the slowdown in China’s energy consumption growth at both national and regional levels. We propose a nested index decomposition analysis (NIDA) model to uncover both the production- and demand-side factors. Development patterns are also defined in terms of energy consumption deceleration. Results show that the national energy consumption deceleration is mainly attributed to economic slowdown rather than improvements in economic structure (including energy mix, industrial structure, regional structure, and demand structure) and energy efficiency, implying that China’s current development pattern is unsustainable because the energy consumption deceleration is gained mainly at the expense of economic expansion. From a regional perspective, the developed regions are on an unsustainable path toward energy consumption deceleration because of relatively limited potential for structural updates and efficiency gains; while most of the less developed regions are on sustainable or unbalanced development paths. Policy recommendations are provided for both national and regional energy consumption deceleration.

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