Energy Efficiency, ProductivityImpacts, and CompositeIndicator Development TheAsianProductivityOrganization(APO)isanintergovernmentalorganizationthatpromotes productivity as a key enablerfor socioeconomic development andorganizational and enterprise growth. Itpromotesproductivity improvementtools, techniques, and methodologies;supportsthe National ProductivityOrganizations of its members; conductsresearch on productivity trends; anddisseminates productivity information,analyses,anddata. TheAPOwasestablishedin 1961 and comprises 21 members. APO Members Bangladesh,Cambodia,RepublicofChina,Fiji, Hong Kong, India, Indonesia, IslamicRepublicofIran,Japan,RepublicofKorea,Lao PDR, Malaysia, Mongolia, Nepal,Pakistan,Philippines,Singapore,SriLanka,Thailand, Turkey, and Vietnam. APOPRODUCTIVITYOUTLOOK 2026 ENERGY EFFICIENCY, PRODUCTIVITYIMPACTS, AND COMPOSITE INDICATORDEVELOPMENT APO Productivity Outlook 2026Energy Efficiency, Productivity Impacts, and Composite Indicator Development Chungnam National University (CNU) served as the volume editor. First edition published in Japanby the Asian Productivity Organization1-24-1 Hongo, Bunkyo-kuTokyo 113-0033, Japanwww.apo-tokyo.org © 2026 Asian Productivity Organization The views expressed in this publication do not necessarily reflect the official views ofthe Asian Productivity Organization (APO) or any APO member. All rights reserved. None of the contents of this publication may be used, reproduced,stored, or transferred in any form or by any means for commercial purposes withoutprior written permission from the APO. Designed by BM Nxt CONTENTS FOREWORDxi EXECUTIVE SUMMARYxiii CHAPTER 11OVERVIEW OF THE IMPACTS OF ENERGY EFFICIENCY ON PRODUCTIVITYAND SUSTAINABILITY IN APO MEMBER ECONOMIES1Introduction12. Definition of Energy Efficiency23. Productivity and Energy Efficiency Data33.1. Construction of Sectoral Productivity Indicators33.2. Data Sources33.3. Estimation Framework43.4. Interpretation and Limitations43.5. Analytical Application54. Productivity and Energy Efficiency55. Productivity Trends in APO Member economies66. Relationship between Energy Efficiency and Productivity126.1. Energy Efficiency Trends in APO Member Economies126.2. Relationship between Energy Efficiency and Total Factor Productivity156.3. Relationship between Energy Efficiency and Labor Productivity167. Impact of Energy Efficiency on Productivity in APO Member Economies187.1. Theoretical and Empirical Literature Review187.2. Energy Efficiency Effects on Productivity: An Empirical Framework197.3. Data197.4. Results208. Relationship between Energy Efficiency and Key Factors258.1. Energy Efficiency and CO₂258.2. Energy Efficiency and Renewable Energy268.3. Energy Efficiency and Urbanization278.4. Energy Efficiency and Gross Capital Formation289. Strategies for Enhancing Energy Efficiency299.1. Policy Instruments299.2. Technological Tools and Innovations309.3. Institutional Arrangements309.4. Sectoral Strategies3110. Conclusion and Policy Implications32References33Appendix34APO Member Economies34 Non-APO Member Economies35OECD Economies35Low-income APO Member Economies35Upper-medium-income APO Member Economies35High-income APO Member Economies35Energy Efficiency Indicators by APO Member Economy35 CHAPTER 2:ENERGY EFFICIENCY AND AGRICULTURAL PRODUCTIVITY:CHALLENGES AND POLICY OPTIONS38 1. Introduction382. Trends of the Agriculture Sector in APO Member Economies393. Theoretical Background and Literature Review434. Data Description in APO Member Economies455. Estimation Methodology496. Empirical Results516.1. Energy Efficiency and Labor Productivity in the Agricultural Sector516.2. Considering the Impact of Climate Change536.3. Comparison by Climate and Crop Production Characteristics546.4. Comparison by High- and Low-energy-efficiency Groups556.5. Comparison by High- and Low-share Groups577. Conclusion and Policy Implications587.1. Summary587.2. Policy Implications60References63Appendix65 CHAPTER 3:ENERGY EFFICIENCY AND PRODUCTIVITY IN THEMANUFACTURING SECTOR 68 1. Introduction682. Background and Conceptual Review702.1 Manufacturing and Economic Growth702.2 Energy Efficiency and Economic Output in the Manufacturing Sector702.3 Research Gap: Energy Efficiency and Productivity in the Manufacturing Sector71 3. Trends in Manufacturing: Energy Efficiency and Economics713.1 Data713.2 Stylized Facts713.3 Relationship between Energy Efficiency and Productivity in Manufacturing914. Effects on the Manufacturing Sector954.1 Empirical Methodology954.2 Estimation Results955. Policy Implications: Scaling Energy Efficiency for Productivity in Manufacturing1015.1 Direct Measures to Raise Energy Efficiency1025.2 Indirect and Enabling Measures1035.3 Differentiated Strategies by Income Level1055.4 Illustrative Policy Packages1075.5 Implementation Roadmap and Governance1075.6 Monitoring and Evaluation Framework1086 Conclusion109 References CHAPTER 4:DEVELOPING COMPOSITE INDICATORS FOR ENERGYEFFICIENCY