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Energy Biased Technical Change: A CGE Analysis

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Author Info
Otto, Vincent M.
Löschel, Andreas
Dellink, Rob

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Abstract

This paper studies energy bias in technical change. For this purpose, we develop a computable general equilibrium model that builds on endogenous growth models. The model explicitly captures links between energy, the rate and direction of technical change, and the economy. We derive the equilibrium determinants of biased technical change and show the importance of feedback in technical change, substitution possibilities between final goods, and generalequilibrium effects for the equilibrium bias. If the feedback effect is strong, or the substitution elasticity large, or both, our model tends to a corner solution in which only technologies are developed that are appropriate for production of non-energy intensive goods.

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Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 05-32.

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Date of creation: 2005
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Handle: RePEc:zbw:zewdip:3278

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Related research
Keywords: computable general-equilibrium models endogenous technical change energy environment

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Find related papers by JEL classification:
D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
O32 - Economic Development, Technological Change, and Growth - - Technological Change - - - Management of Technological Innovation and R&D
O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes
O38 - Economic Development, Technological Change, and Growth - - Technological Change - - - Government Policy

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Reyer Gerlagh & Wietze Lise, 2003. "Induced Technological Change Under Carbon Taxes," Working Papers 2003.84, Fondazione Eni Enrico Mattei. [Downloadable!]
  2. Lau, Morten I. & Pahlke, Andreas & Rutherford, Thomas F., 2002. "Approximating infinite-horizon models in a complementarity format: A primer in dynamic general equilibrium analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 26(4), pages 577-609, April. [Downloadable!] (restricted)
  3. David Popp, 2003. "ENTICE: Endogenous Technological Change in the DICE Model of Global Warming," NBER Working Papers 9762, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Buonanno, Paolo & Carraro, Carlo & Galeotti, Marzio, 2003. "Endogenous induced technical change and the costs of Kyoto," Resource and Energy Economics, Elsevier, vol. 25(1), pages 11-34, February. [Downloadable!] (restricted)
  5. Jakeman, Guy & Hanslow, Kevin & Hinchy, Mike & Fisher, Brian S. & Woffenden, Kate, 2004. "Induced innovations and climate change policy," Energy Economics, Elsevier, vol. 26(6), pages 937-960, November. [Downloadable!] (restricted)
  6. Rutherford, Thomas F, 1999. "Applied General Equilibrium Modeling with MPSGE as a GAMS Subsystem: An Overview of the Modeling Framework and Syntax," Computational Economics, Springer, vol. 14(1-2), pages 1-46, October. [Downloadable!]
  7. Susanto Basu & David N. Weil, 1998. "Appropriate Technology And Growth," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1025-1054, November. [Downloadable!] (restricted)
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  8. Ferris, Michael C. & Munson, Todd S., 2000. "Complementarity problems in GAMS and the PATH solver1," Journal of Economic Dynamics and Control, Elsevier, vol. 24(2), pages 165-188, February. [Downloadable!] (restricted)
  9. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-51, March. [Downloadable!] (restricted)
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  10. Acemoglu, Daron, 2002. "Directed Technical Change," Review of Economic Studies, Blackwell Publishing, vol. 69(4), pages 781-809, October.
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  11. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October. [Downloadable!] (restricted)
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  12. Gerlagh, Reyer & van der Zwaan, Bob, 2003. "Gross world product and consumption in a global warming model with endogenous technological change," Resource and Energy Economics, Elsevier, vol. 25(1), pages 35-57, February. [Downloadable!] (restricted)
  13. Rivera-Batiz, Luis A & Romer, Paul M, 1991. "Economic Integration and Endogenous Growth," The Quarterly Journal of Economics, MIT Press, vol. 106(2), pages 531-55, May. [Downloadable!] (restricted)
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Cited by:
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  1. Brita Bye, Taran Fæhn and Tom-Reiel Heggedal, 2007. "Welfare and growth impacts of innovation policies in a small, open economy. An applied general equilibrium analysis," Discussion Papers 510, Research Department of Statistics Norway. [Downloadable!]
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