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Interfuel Substitution: A Meta‐Analysis

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  • David I. Stern

Abstract

Interfuel substitutability has been of longstanding interest to energy economists and policy makers. However, there has been no quantitative meta-analysis of this literature. This research report fills this gap by analysing a broad sample of studies of interfuel substitution in the industrial sector, manufacturing industry or sub-industries, and macro-economy of a variety of developed and developing economies. The primary study sample size has been included in the meta-regression to control for publication bias. At the industrial level, results for the shadow elasticities of substitution between coal, oil, gas, and electricity for forty-six primary studies show that, except for gas-electricity and coal-electricity, there are easy substitution possibilities between all the fuel pairs. Substitution possibilities seem more constrained at the macro level and less constrained in sub-industries. Estimates also vary across countries. Publication bias does not appear to be present, but model and data specification issues very significantly affect the estimates derived by each individual study. Estimates from cross-section regressions are generally largest, and fixed effects panel estimates are intermediate. Time-series estimates are mostly much smaller. Econometric research suggests that the fixed effects estimates, although biased downwards, are likely to be the best among the existing studies.

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Article provided by Wiley Blackwell in its journal Journal of Economic Surveys.

Volume (Year): 26 (2012)
Issue (Month): 2 (04)
Pages: 307-331

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Handle: RePEc:bla:jecsur:v:26:y:2012:i:2:p:307-331

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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Journal of Economic Surveys 2012
    by David Stern in Stochastic Trend on 2012-02-08 10:45:00
  2. Substitutability of Energy and Capital
    by David Stern in Stochastic Trend on 2010-04-20 00:00:00
  3. Journal of Economic Surveys
    by David Stern in Stochastic Trend on 2009-08-04 03:06:00
  4. Why Most Published Research Results are False
    by David Stern in Stochastic Trend on 2009-07-23 23:23:00
  5. Designing a Job Talk
    by David Stern in Stochastic Trend on 2009-07-07 14:42:00
  6. Interfuel Substitution and the Costs of Climate Change Policy
    by David Stern in Stochastic Trend on 2009-07-03 01:38:00
  7. Interfuel Substitution: A Meta-Analysis - Accepted for Publication
    by David Stern in Stochastic Trend on 2010-08-10 10:29:00
  8. The Environment and Directed Technical Change: Acemoglu et al.
    by David Stern in Stochastic Trend on 2010-04-28 08:28:00
  9. Revise and Resubmit...
    by David Stern in Stochastic Trend on 2009-11-16 22:33:00
  10. Energy Quality
    by David Stern in Stochastic Trend on 2009-08-19 12:43:00
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. Yingying Lu & David I. Stern, 2014. "Substitutability and the Cost of Climate Mitigation Policy," CAMA Working Papers 2014-28, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
  2. Thomas Michielsen, 2013. "Brown Backstops Versus the Green Paradox," OxCarre Working Papers 108, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
  3. Jack Gregory & David I. Stern, 2012. "Fuel Choices in Rural Maharashtra," CCEP Working Papers 1207, Centre for Climate Economics & Policy, Crawford School of Public Policy, The Australian National University.
  4. Stern, David I., 2009. "Energy quality," MPRA Paper 16857, University Library of Munich, Germany.
  5. Adams, Philip D. & Parmenter, Brian R., 2013. "Computable General Equilibrium Modeling of Environmental Issues in Australia," Handbook of Computable General Equilibrium Modeling, Elsevier.
  6. Lin, Boqiang & Wesseh, Presley K., 2013. "Estimates of inter-fuel substitution possibilities in Chinese chemical industry," Energy Economics, Elsevier, vol. 40(C), pages 560-568.
  7. Dr. Ulrike Lehr & Dr. Christian Lutz & Kirsten Wiebe, 2011. "Medium Term Economic Effects of Peak Oil Today," GWS Discussion Paper Series 11-3, GWS - Institute of Economic Structures Research.
  8. Antimiani Alessandro & Valeria Costantini & Anil Markandya & Chiara Martini & Alessandro Palma & Maria Cristina Tommasino, 2014. "A dynamic CGE modelling approach for analyzing trade-offs in climate change policy options: the case of Green Climate Fund," SEEDS Working Papers 1614, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Jun 2014.
  9. Martin de Wit & Matthew Kuperus Heun & Douglas J Crookes, 2013. "An overview of salient factors, relationships and values to support integrated energy-economic systems dynamic modelling," Working Papers 02/2013, Stellenbosch University, Department of Economics.
  10. Beckman, Jayson & Hertel, Thomas & Tyner, Wallace, 2011. "Validating energy-oriented CGE models," Energy Economics, Elsevier, vol. 33(5), pages 799-806, September.
  11. Ivan Diaz-Rainey & Mathias Siems & John K. Ashton, 2011. "The financial regulation of energy and environmental markets," Journal of Financial Regulation and Compliance, Emerald Group Publishing, vol. 19(4), pages 355-369, November.
  12. Papageorgiou, Chris & Saam, Marianne & Schulte, Patrick, 2013. "Elasticity of substitution between clean and dirty energy inputs: A macroeconomic perspective," ZEW Discussion Papers 13-087, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.

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