Decoupling factors on the energy–output linkage: The Spanish case

The recent increase of energy intensity in Spain and the ratification of the Kyoto protocol call for the implementation of energy policies in Spain. In this paper, we investigate the relationship between Gross Domestic Product (GDP) and Energy Consumption (EC) by taking into account several decoupling factors that can affect this linkage. Specifically, we have considered the temporal aggregation of data and its seasonal adjustments, the multivariate methodology, the substitution between EC and other inputs and the technological changes. Empirical tests reveal a long-run relationship between EC and GDP that can only be established in a complete way with a multivariate cointegration analysis. Furthermore, a short-run unidirectional causality from EC to economic growth is found. Therefore, primary EC plays an important role as a limiting factor for economic growth in Spain in the short-run.