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How does artificial intelligence affect manufacturing firms' energy intensity?

Year: 2024

Type: article

Abstract: This paper investigates the effects of artificial intelligence (AI) on manufacturing firms' energy intensity (EI) by examining the substitutive role of AI in factor inputs . We assess how AI advancements and the assimilation can improve productivity and enhance energy efficiency, potentially reducing EI. Using a dataset of Chinese listed manufacturing companies from 2006 to 2020, this study quantifies AI adoption through text analysis of firms' annual reports. The findings indicate that AI applications can significantly improve production efficiency and energy efficiency, thereby significantly diminishing firms' EI. This trend is more pronounced for private sector companies and for firms in cities not included in the smart city pilot project. The study concludes with policy recommendations to advance energy conservation and emissions reduction.

Source: Energy Economics

DOI: 10.1016/j.eneco.2024.108109

Authors: Hongyu Li, Zhiqiang Lu, Zhengping Zhang, Cristina Tanasescu

Institutions: Guangdong University of Technology, Beijing Technology and Business University, Lucian Blaga University of Sibiu

Language: English

Topic: Energy, Environment, Economic Growth

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Industry, innovation and infrastructure, Affordable and clean energy, Climate action

Open Access status: hybrid

Estimated APC paid: $3,680