*Energies* **2020**, *13*, 3954



Figure 3 shows the evolution of average efficiency over time by the type of efficiency. Figures 4–6 show densities of three types of efficiencies using the formula in (13) for models 1, 2, and 3, respectively by decade. The three columns in each of the there figures present overall, transient, and persistent efficiencies. Recall that the overall efficiency is the product of transient and persistent efficiencies. The rows from 1 to 5 show the decades from the 1960s through the 2000s.

**Figure 3.** Average efficiency by year, energy intensity, and type of efficiency. The abbreviation HI stands for high intensity and LI means low intensity. Notes: The dotted time-series lines are for the high and solid lines are for low intensity industries.

**Figure 4.** Overall, transient and persistent energy efficiency, Model 1. Notes: Solid black curves are high energy-intensive industries, dotted red curves are low energy-intensive industries. Vertical lines are respective mean values.

Models 2 and 3 measure energy use efficiency directly. Since we are applying the 4-component model, the overall energy use efficiency is decomposed into the persistent and transient components. The left column of Figure 5 reveals that the overall energy use efficiency has deteriorated over time. This is also confirmed by the middle and lower panels in Figure 3. We note again that the efficiencies are not comparable as they are measured relative to decade-specific frontiers, however, we can gauge how industries performed within decades. The energy use efficiency was very low in the 1970s, which could be the result of the oil crisis, which hit all industries of the economy. The overall efficiency figure in the 1970s, however, additionally reveals that the high energy-intensive industries were hit much harder. We have seen in Table 1 that some industries consume energy up to about a third of their actual sales. The lower panels in the left column of Figure 5 and middle panel in Figure 3 indicate that high energy-intensive industries were rebounding from the oil crisis and were only short of reaching the level of overall energy use efficiency only in the 2000s. The levels of overall energy use efficiency are still very low by any standard for energy-intensive industries. The energy use efficiency of the low energy-intensive industries is quite stable relative to the decade specific frontiers. Clearly, if the share of energy costs in production is very low as Table 1 suggests, the shocks to energy use are not that profound.

**Figure 5.** Overall, transient and persistent energy efficiency, Model 2. Notes: Solid black curves are high energy-intensive industries, dotted red curves are low energy-intensive industries. Vertical lines are respective mean values.

Looking at the components of the overall efficiency, we again observe that the overall inefficiency is mainly rooted in the structural energy use inefficiency. The density of the transient efficiency with an exception of the 1960s is concentrated around unity. The structural efficiency is shown in the third column of Figure 5 and as persistent efficiency in Figure 3. For low energy-intensive industries, it remains virtually unchanged, albeit relative to the decade-specific frontier. As is expected after discussion of the overall efficiency, the persistent efficiency of the high energy-intensive industries plummeted in the 1970s and increased gradually only in the 2000s.

**Figure 6.** Overall, transient and persistent energy efficiency, Model 3. Notes: Solid black curves are high energy-intensive industries, dotted red curves are low energy-intensive industries. Vertical lines are respective mean values.

#### *5.3. Discussion*

It is worth noting that because we have estimated decade-specific frontiers, the efficiencies across decades are not directly comparable. Thus, we discuss the differences in efficiencies that are estimated relative to their frontiers. Overall, the level of efficiency is close to that reported by [44]. Based on Model 1, one result the becomes evident is that the industries move further away from the frontier over time. We cannot say whether this is because they were lagging behind technological progress or whether they were becoming less efficient. The second feature is that transient inefficiency is almost non-existent and input inefficiency almost completely stems from structural inefficiency. Third, we see a drop in efficiency in the 2000s, which can be attributed to downturns at the beginning of the 2000s as well as the financial crisis at the end of the decade. Finally, in terms of overall input inefficiency, both high and low energy-intensive industries perform similarly. Only in the 2000s, low energy-intensive industries seem to slightly over-perform high energy-intensive industries. We find confirmation for average levels in Figure 3.

Figure 6 summarizes the energy use efficiency for the third model, which is only slightly different from Model 2. The change that we observe in Figure 6 relative to Figure 5 is only quantitative. Conclusions that we drew from Figure 5 can be repeated for Model 3, so that the results of the third model can be seen as a robustness check.

It is difficult to say why we observe the so-called "energy paradox". The US is known to promote energy efficiency policy (see, e.g., [33]). However, such policies lead to different outcomes. In Sweden for example, the adoption rate of energy efficiency measures is over 40% ([45]). Although financial intensive may be an important one in some industries and countries ([46]), Refernece [4] document lack of adoption, which constitutes the above paradox. The authors of [47] find that the most important barriers to more energy-efficient organization are internal economic and behavioral barriers. The authors of [48] name additional barriers including lack of interest in energy efficient technologies. Further, their findings suggest that adopting sound energy management practices is the most important driver of increased energy efficiency. Adopting cost-effective technologies is also important, but less so than the above-mentioned practices.
