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Feasibility and Economic Impacts of the Energy Transition

Author

Listed:
  • Elise Dupont

    (iMMC (Institute of Mechanics, Materials and Civil Engineering), Université Catholique de Louvain, 1348 Louvain-la-Neuve, Belgium)

  • Marc Germain

    (Université Lille, CNRS, IESEG School of Management, UMR 9221-LEM-Lille Économie Management and IRES, Université Catholique de Louvain, 1348 Louvain-la-Neuve, Belgium)

  • Hervé Jeanmart

    (iMMC (Institute of Mechanics, Materials and Civil Engineering), Université Catholique de Louvain, 1348 Louvain-la-Neuve, Belgium)

Abstract

There is currently no consensus regarding whether or not renewable energies are capable of supplying all of our energy needs in the near future. To shed new light on this controversy, this paper develops a methodology articulating a macroeconomic model with two sectors (energy and non-energy) and an energy model that is able to calculate the maximum potentials of solar and wind energy. The results show that, in a business-as-usual context, a complete energy transition on a global scale is unachievable before the end of the century. The reason lies in the increasing capital needs of the energy sector, which slows, if not stops, economic growth and the energy transition. A complete transition can be achieved by 2070 provided that (i) energy demand is kept under control at its current level, (ii) a sufficient rate of capital growth is sustained (above its historical level), and (iii) substantial progress is made in terms of energy efficiency. However, this strategy requires a significant increase in the savings rate, with a negative impact on consumption, which ends up stagnating at the end of the transition.

Suggested Citation

  • Elise Dupont & Marc Germain & Hervé Jeanmart, 2021. "Feasibility and Economic Impacts of the Energy Transition," Sustainability, MDPI, vol. 13(10), pages 1-34, May.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:10:p:5345-:d:552040
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    References listed on IDEAS

    as
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    Cited by:

    1. Jacques, Pierre & Delannoy, Louis & Andrieu, Baptiste & Yilmaz, Devrim & Jeanmart, Hervé & Godin, Antoine, 2023. "Assessing the economic consequences of an energy transition through a biophysical stock-flow consistent model," Ecological Economics, Elsevier, vol. 209(C).
    2. Małgorzata Gawrycka & Anna Szymczak, 2021. "A Panel Analysis of the Impact of Green Transformation and Globalization on the Labor Share in the National Income," Energies, MDPI, vol. 14(21), pages 1-14, October.
    3. Mateusz Trzeciak & Izabela Jonek-Kowalska, 2021. "Monitoring and Control in Program Management as Effectiveness Drivers in Polish Energy Sector. Diagnosis and Directions of Improvement," Energies, MDPI, vol. 14(15), pages 1-25, July.
    4. Huang, Shi-Zheng, 2022. "The effect of natural resources and economic factors on energy transition: New evidence from China," Resources Policy, Elsevier, vol. 76(C).
    5. Louis Delannoy & Pierre-Yves Longaretti & David. J. Murphy & Emmanuel Prados, 2021. "Assessing Global Long-Term EROI of Gas: A Net-Energy Perspective on the Energy Transition," Energies, MDPI, vol. 14(16), pages 1-16, August.
    6. Talat S. Genc & Stephen Kosempel, 2023. "Energy Transition and the Economy: A Review Article," Energies, MDPI, vol. 16(7), pages 1-26, March.

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