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Effect of Feed-In Tariff with Deregulation on Directed Technical Change in the Energy Sector

Author

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  • Nakada Minoru

    (Graduate School of Environmental Studies, Nagoya University, Furo, Chikusa, Nagoya, 464-8601, Japan)

Abstract

In this study, we examine how a feed-in tariff (FIT) accompanied with deregulation in the energy sector affects the direction of technical change along the balanced growth path. A final good is composed of resource-saving (such as renewable) energy and traditional resource-intensive energy. The government introduces a FIT scheme for promoting resource-saving energy, while it deregulates the traditional energy sector for efficiency improvement. The implementation of the scheme positively affects directed technical change toward the resource-saving energy technology and economic growth. Meanwhile, the biased technical change leads to an upsurge in the surcharge. Associated deregulation not only accelerates the biased technical change but also drives the surge in the surcharge rate, unless the initial market structure of the traditional energy sector is highly concentrated.

Suggested Citation

  • Nakada Minoru, 2022. "Effect of Feed-In Tariff with Deregulation on Directed Technical Change in the Energy Sector," The B.E. Journal of Macroeconomics, De Gruyter, vol. 22(2), pages 765-785, June.
    • Handle: RePEc:bpj:bejmac:v:22:y:2022:i:2:p:765-785:n:13
    DOI: 10.1515/bejm-2021-0177
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    More about this item

    Keywords

    feed-in tariff; deregulation; directed technical change;
    All these keywords.

    JEL classification:

    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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