Decomposition of energy consumption and its decoupling with economic growth in the global agricultural industry

Highlights

• Decoupling statuses of 89 countries are identified.

• Only 18 countries have reached strong decoupling.

• Agricultural energy consumption is decomposed.

• Inhibiting factors are AL, LI, and EI in descending order.

• A driving factor is EO.

Abstract

The development of mechanization and technology has triggered the growing energy consumption in the agricultural industry. Energy saving in the agriculture industry becomes equally essential with that in the manufacturing, building, and transportation industries. The implementation of reducing energy consumption should be without costing the agricultural production, which is closely related to the food security of human beings. Strong decoupling between energy consumption and economic growth indicates the former decreases while the latter grows, which should be pursued by nations. Therefore, as the first research objective, this study analyzed the decoupling statuses between energy consumption and economic growth in the agricultural industry of 89 countries whose data exist across the period of 2000 to 2016. As a result, only 18 countries have reached strong decoupling. Secondly, this study decomposed agricultural energy consumption in the 89 countries to the effects of a driving factor (i.e., agricultural economic output) and three inhibiting factors (i.e., agricultural land, labor intensity, and energy intensity in descending order). With the identified decoupling statuses, this study provides a substantial understanding of the relationship between agricultural energy consumption and production from a global perspective. Meanwhile, the decomposed factors and corresponding policy implications provide evidence for decision makers of each nation to tailor energy-saving strategies in its agricultural industry.

Introduction

The agricultural industry is one of the most crucial industries for countries worldwide as agricultural has been long believed closely related to many aspects indicating national development. Firstly, agriculture is the basis of food security (Gebbers and Adamchuk, 2010), but the continuing population and consumption growth of the world stimulate the food demand for at least four more decades since then (Godfray et al., 2010). Secondly, as calculated based on the available data from World Bank (2019), the average percentage of annual GDP for agricultural industry (aGDP) accounts for around 9.49% during the period from 2010 to 2016, while the percentages of some countries, such as Niger, Ethiopia, Kenya, and Sudan, still accounted for >30% of their total national GDPs in 2016 although the percentages of global agriculture showed tendencies of decrease (World Bank, 2019). Thirdly, the agricultural development drives the increment of the employment rate of a country (Kuznets and Murphy, 1966). Fourthly, agriculture can become the driving factor to reduce the poverty of a country (Cervantes-Godoy and Dewbre, 2010).

Attributed to mechanization and technology in agriculture, the use of human and animal power in this industry decreased year by year (Ozkan et al., 2004). The rapid development of machinery and farm technologies has stimulated the intensive energy consumption in agricultural industries, which are closely related to farm economic and environmental issues (Soni et al., 2013). Agriculture has accounted for a neglectable proportion of many countries' energy consumption. Energy consumption has been pointed out as the most expensive input when farming greenhouse crops (Hassanien et al., 2016). Another study further found oil products are the largest energy sources in agriculture (Soni et al., 2013). In 2016, the world agricultural industry consumed 198 million tonne of oil equivalent (mtoe), which includes 104 mtoe oil products, 53 mtoe electricity, 16 mtoe coal, and 10 mtoe natural gas. The increasing consumption of energy can bring adverse effects on many aspects, particularly CO² emission. Currently, agriculture has been pointed out responsible for about 25% of total greenhouse gas emissions from human activities (Smith et al., 2014). For example, transplanted rice contributes the largest amount of CO₂ emission (906 kg CO₂/ha) among all crops as Soni et al. (2013) studied in Thailand. In addition, growing competition for energy will affect human-beings' ability to produce food (Godfray et al., 2010). In addition, the initial cost for the input fossil fuels and other traditional energy sources are largely growing (Hassanien et al., 2016; Qiao et al., 2019a, Qiao et al., 2019b).

The adverse environmental effects, limited fossil fuels and a considerable amount of cost on energy inputs brought from the development of the agricultural industry have urgently called for an energy-efficient alternative. Yet, the agricultural industry has great potentials for mitigating those adverse impacts towards low energy consumption at a relatively smaller amount of cost than other sectors (Smith et al., 2014; Schneider and Smith, 2009). The tremendous but difficult-to-implement idea is the energy consumption of a country should be the lower, the better without sacrificing the agricultural economic development of a nation. For identifying and classifying the relationships between energy consumption and economics, decoupling analysis has been employed frequently to understand the connections between carbon emissions and economic growth in countries and cities (Wu et al., 2019; Shuai et al., 2019). Especially for the agricultural industry, attempts for analyzing the decoupling relationships on CO₂ emission have also been made at the country level (Luo et al., 2017) and region level (Xiong et al., 2016). Decoupling energy use and economic development in the agricultural industry – another pressing issue – calls to be pursued to adapt to the modernization and mechanization in agriculture. However, very few studies in the past have identified the decoupling statuses of energy consumption from economic growth in the agricultural industry from a global perspective, neither have decomposed the crucial factors driving or inhibiting the global agricultural energy consumption. Therefore, this study identifies the decoupling statuses between agricultural energy use and agricultural value added of 89 countries (at the global level) from 2000 to 2016. Then, the key driving and inhibiting factors of agricultural energy consumption change are analyzed towards purposeful decoupling efforts.