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Modeling International Trends in Energy Efficiency and Carbon Emissions


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  • Stern, David I.


This study uses a stochastic production frontier to model energy efficiency trends, in 85 countries over a 37 year period. No structure is imposed on technological change over time, although differences in technology level across the countries are modelled as a stochastic function of explanatory variables. These variables are selected by a literature survey and a theoretical model of energy-efficient technology choice. An improvement in a country’s energy efficiency is measured as a reduction in energy intensity, while holding constant that economy’s mix of inputs and outputs. All other things remaining constant, the country using the least energy per unit output is on the global best-practice frontier. The model is used to derive decompositions of energy intensity and carbon emissions. It also examines whether there is a convergence across countries. The study shows that energy efficiency rises with increasing general total factor productivity. Energy efficiency is also higher in countries with undervalued currencies. Higher fossil fuel reserves are associated with lower energy efficiency. Energy efficiency converges over time across countries. Technological change was the most important factor counteracting the effect of economic growth in increasing global energy- use increase and carbon emissions.

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Bibliographic Info

Paper provided by Australian National University, Environmental Economics Research Hub in its series Research Reports with number 94950.

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Date of creation: Mar 2010
Date of revision:
Handle: RePEc:ags:eerhrr:94950

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Keywords: Energy; efficiency; carbon; emissions; technological change; between estimator; Environmental Economics and Policy; Resource /Energy Economics and Policy; O13; O33; O47; Q43; Q54; Q55; Q56;

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  1. David Popp & Richard G. Newell & Adam B. Jaffe, 2009. "Energy, the Environment, and Technological Change," NBER Working Papers 14832, National Bureau of Economic Research, Inc.
  2. Lopez, Ramon & Mitra, Siddhartha, 2000. "Corruption, Pollution, and the Kuznets Environment Curve," Journal of Environmental Economics and Management, Elsevier, vol. 40(2), pages 137-150, September.
  3. van Zon, Adriaan & Yetkiner, I. Hakan, 2003. "An endogenous growth model with embodied energy-saving technical change," Resource and Energy Economics, Elsevier, vol. 25(1), pages 81-103, February.
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Blog mentions

As found by, the blog aggregator for Economics research:
  1. Hub Project Almost Wrapped Up
    by David Stern in Stochastic Trend on 2012-03-14 10:17:00
  2. 3. Energy Intensity is not Correlated with GDP per Capita
    by David Stern in Stochastic Trend on 2011-11-04 07:09:00
  3. Australia's 2010 Emissions Projection Released
    by David Stern in Stochastic Trend on 2011-02-08 22:54:00
  4. A Clarification, 14 Years On...
    by David Stern in Stochastic Trend on 2010-11-26 23:49:00
  5. Submitted my Main Hub Paper
    by David Stern in Stochastic Trend on 2010-08-18 13:40:00
  6. Shifts in the Composition of Output
    by David Stern in Stochastic Trend on 2010-04-22 01:23:00
  7. Innovation and Energy Efficiency
    by David Stern in Stochastic Trend on 2010-04-21 05:24:00
  8. Energy Mix and Energy Intensity
    by David Stern in Stochastic Trend on 2010-04-17 04:49:00
  9. Final Hub Report
    by David Stern in Stochastic Trend on 2010-03-26 05:16:00
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Cited by:
  1. David I. Stern, 2010. "The Role of Energy in Economic Growth," CCEP Working Papers 0310, Centre for Climate Economics & Policy, Crawford School of Public Policy, The Australian National University.
  2. Stern, David I. & Jotzo, Frank, 2010. "How Ambitious are China and India’s Emissions Intensity Targets?," Research Reports 94947, Australian National University, Environmental Economics Research Hub.
  3. Stern, David I., 2010. "Between estimates of the emissions-income elasticity," Ecological Economics, Elsevier, vol. 69(11), pages 2173-2182, September.
  4. Lin, Boqiang & Yang, Lisha, 2013. "The potential estimation and factor analysis of China′s energy conservation on thermal power industry," Energy Policy, Elsevier, vol. 62(C), pages 354-362.


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