Prices, technology development and the rebound effect
AbstractEnergy efficiency is the critical parameter for policies that aim at reducing energy consumption while maintaining or even boosting economic growth. The two main options to influence energy efficiency are changes in relative prices, i.e., raising the price of energy through economic instruments, or to introduce new technologies which increase the productivity of each unit of energy. This paper is based on the notion that in an equilibrium economy the marginal economic productivity is identical for all factors, i.e., energy, labour, knowledge and capital. From this premise two main conclusions can be drawn. First, any change in price or technology will have an impact on the whole economy by creating feedbacks through the substitution of factors of production and goods, as well as increased wealth. Second, the two policy approaches, changing relative prices and technology development, are not opposite to each other. They are the two faces of the same reality and should be developed and promoted simultaneously and consistently.
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Bibliographic InfoPaper provided by Paris Dauphine University in its series Economics Papers from University Paris Dauphine with number 123456789/10972.
Date of creation: Jun 2000
Date of revision:
Publication status: Published in Energy Policy, 2000, Vol. 28, no. 6–7
Technological efficiency improvements; Energy prices; Rebound effect; Policy mix;
Find related papers by JEL classification:
- Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
- Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
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