| The Service Transition and Energy Lund University Lund University Gotland University Abstract: The service transition is usually presented in the literature as one of the factors that contributes to the decline of energy intensities of developed economies. We show that this is based on false beliefs about what the service economy is about. Most of the studies investigating the impact of structural changes on energy intensity on a multi-sector setting have used sector shares in current prices which ignore the different behavior of industrial and service productivity and we argue for the use of sector shares in constant prices. We investigate the impact of structural and technological effects on the final energy intensity of 10 developed and 4 developing countries in a 4 sector context (Agriculture, Industry, Services, Transportation) and 2 end users (households and personal transportation) employing logarithmic mean Divisia index (LMDI) techniques. We find that structural changes have a positive impact on energy intensity both in developed and developing countries, because there is not much of a service transition in constant pricesm, instead it is transport, which is energy-demanding that increase its share. The explanation for the decline in energy intensity in developed countries lies within the sectors. For fast growing developing countries it is the residential sector that drives energy intensity down, because of declining share of this sector as the formal economy grows and incomes increase and as a consequence of fuel switching to more efficient fuels. 
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