Principal Factors on World Energy Consumption

Abstract

This study utilizes Principal Component Analysis (PCA) to explore various factors’ relative contributions to energy consumption in the world. Results revealed that desired World Energy Consumption Index (WECI) is composed of three mutually orthogonal components, namely: Transportation Energy Consumption and Demographics Index which measure the energy consumption on transportation and so do population and area; Location and Economy Index which denotes on Economy, GDP, Temperature and FDI and Temperature Index which measures the apparent temperature or what human perceive or feel like the temperature affecting their body. So, it implies that the world energy policy needs to be orientated in the form of expanding the supply of energy to reachsustainable economic growth and development