The Key Drivers of the Final Energy Consumption in the Italian and Swedish Residential Sector

Abstract: This thesis analyses the energy consumption of the Italian and Swedish residential sector during the last two decades. It has two main purposes: (1) to test the Environmental Kuznets Curve (EKC) hypothesis that stipulate a decoupling relation between environmental harm and economic growth and (2) to investigate on four factors that could explain such decoupling relation. The key factors are the change in population, the residential energy intensity, the fuel-mix composition, and the floor area inhabited. The decoupling analysis is conducted thanks to the Tapio’s decoupling method, while the decomposition thanks to the LMDI decomposition index analysis. The results show that both the Italian and Swedish residential sector confirms the EKC hypothesis, and they present a favourable decoupling; it has been registered a strong decoupling period between 1996-2007 for Sweden and 2010-2018 for Italy. The main causes are attributable to improvements in energy intensity and to a shift from oil to other fuels. Furthermore, the study reveals that in the Swedish case, after 2007, a growing population and an increase in the floor area inhabited have been the major causes to an incrementation in residential energy consumption.