A Decomposition Approach to Energy Policy Analysis

Initiative Evaluation of Public Investment Projects
Type Commentary
Date 18 September 2023

Applied general model
Bottom up model
Discount rate
Discounting
Domestic energy pricing
DSGE
Economic distortions
Economic diversification
energy
Energy policy
Fiscal policy
General Equilibrium models
Government expenditure
Hybrid model
intergenerational equity
Macroeconomics
Market stability
Natural capital
Oil
Oil price
Oil-exporting countries
OPEC
Opportunity cost
Partial equilibrium models
Policy Analysis
Projections
Public economics
Renewable energy
Resilience to Shocks
Saudi Arabia
Shadow pricing
Sovereign wealth fund
Spare capacity
Stabilization fund
Structural changes
Subsidies
Taxation
uncertainty
Vision 2030
Wealth accounting
Welfare

Abstract

Index decomposition analysis (IDA) has been used to study energy use movements since the 1980s. Methods at that time consisted primarily of multiplying factors that ultimately yielded the aggregate quantity, such as energy use. IDA is a straightforward way for researchers to examine the individual impacts of economic intensity, economic structure, and other factors on energy consumption or greenhouse gas emissions. Other methods could take more complex approaches, such as analyzing the outputs of energy system models, to decompose aggregate quantities.

Authors

Walid Matar

Research Fellow Walid works on modeling energy systems. He is developing or has developed the following components of the KAPSARC Energy Model… Walid works on modeling energy systems. He is developing or has developed the following components of the KAPSARC Energy Model (KEM): electric power generation, oil refining, petrochemicals and fertilizers, cement production, and iron and steel. He is also working on a bottom-up residential electricity use framework that merges microeconomics with the physical laws governing electricity use.

Expertise