Energy and Economic Competitiveness Workshop
Summary
9 May 2016, Canberra, Australia
James Kendell
APERC
Background
• At the economy level, export competitiveness is a situation
where an economy produces goods and services cheaply
enough to compete in a world market.
• Even though world oil prices are relatively low today,
experience tells us that prices are likely to rise as demand rises
and upstream investment recedes.
• High oil prices not only affect households and industry directly,
but they make the cost of energy-intensive goods rise,
decreasing the manufacturing export share in energyimporting economies and increasing the export share in
energy-exporting economies.
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Statistical Results
• IEEJ’s regression results show that the relative price of
electricity has a significant effect on industrial competitiveness
in the minerals sector. (In other words, the electricity price in
one economy relative to other economies is related to the
share of minerals exports in that economy relative to the share
of the minerals sector in the world economy. )
• Electricity prices and energy intensity seem to have little
impact on industrial competitiveness. (Energy intensity is final
energy consumption per value added.)
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Model Results
• IEEJ’s equilibrium model results show that lower fossil fuel
prices benefit the relative trade balance in manufacturing in
the Russian Federation and Australia--but not the United
States, where low-cost oil and gas production is preferred to
manufacturing. (In other words, in the face of lower fossil fuel
prices net manufacturing exports as a share of trade rise in the
Russian Federation and Australia.)
• Improved energy efficiency and a shift to low-carbon power
generation technologies have a slight positive effect on
industrial competitiveness for APEC as a whole.
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