The Impact of International Trade on Changing Patterns of Energy Use in South African Industry

South Africa’s competitiveness in many industrial products is dependent on its abundant natural resources, resulting in significant trade in natural resource (and in some cases energy) based products. These mining and manufacturing goods have benefited from the country’s policy of subsidising industrial energy prices. There is thus sufficient reason to believe that South Africa’s trade in industrial goods has a significant impact on the country’s domestic energy requirements. This study adopts a structural input-output approach to test the extent to which this hypothesis is valid. The effects that South African industry trade components have on the country’s energy use patterns are then decomposed using the refined Laspeyres technique in order to establish the underlying causes of change in the country’s energy requirements.Energy Use, Trade, Decomposition