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Energy consumption and energy R&D in OECD: Perspectives from oil prices and economic growth

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  • Leng Wong, Siang
  • Chia, Wai-Mun
  • Chang, Youngho
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    Abstract

    We estimate the short-run and long-run elasticities of various types of energy consumption and energy R&D to changes in oil prices and income of the 20 OECD countries over the period of 1980–2010 using the Nerlove partial adjustment model (NPAM). We find negative income elasticity for coal consumption but positive income elasticity for oil and gas consumption suggesting the importance of economic growth in encouraging the usage of cleaner energy from coal to oil and gas. By introducing time dummies into the regressions, we show that climatic mitigation policies are able to promote the usage of cleaner energies. Through the dynamic linkages between energy consumption and energy R&D, we find that fossil fuel consumption promotes fossil fuel R&D and fossil fuel R&D in turn drives its own consumption. Renewable energy R&D which is more responsive to economic growth reduces fossil fuel consumption and hence fossil fuel R&D.

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    Bibliographic Info

    Article provided by Elsevier in its journal Energy Policy.

    Volume (Year): 62 (2013)
    Issue (Month): C ()
    Pages: 1581-1590

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    Handle: RePEc:eee:enepol:v:62:y:2013:i:c:p:1581-1590

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    Web page: http://www.elsevier.com/locate/enpol

    Related research

    Keywords: Renewable energy consumption; Renewable energy R&D; Fossil fuels;

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    1. Zia Wadud & Daniel Graham & Robert Noland, 2009. "A cointegration analysis of gasoline demand in the United States," Applied Economics, Taylor & Francis Journals, vol. 41(26), pages 3327-3336.
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    9. Narayan, Paresh Kumar & Smyth, Russell, 2007. "A panel cointegration analysis of the demand for oil in the Middle East," Energy Policy, Elsevier, vol. 35(12), pages 6258-6265, December.
    10. Huntington, Hillard G., 2010. "Short- and long-run adjustments in U.S. petroleum consumption," Energy Economics, Elsevier, vol. 32(1), pages 63-72, January.
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