IDEAS home Printed from https://ideas.repec.org/a/aen/journl/2004v25-01-a04.html
   My bibliography  Save this article

The Mechanisms for Autonomous Energy Efficiency Increases: A Cointegration Analysis of the US Energy/GDP Ratio

Author

Listed:
  • Robert K. Kaufmann

Abstract

Many forecasts for energy use and carbon emissions assume that energy intensity will decline over time for reasons unrelated to energy prices, which are termed autonomous energy efficiency increases (AEEI). A cointegration analysis of a vector error correction model indicates that the types of fuels consumed, personal consumption expenditures spent on energy, and energy prices account for changes in the ratio of energy use to economic activity in the US between 1929 and 1999. Cointegration indicates that AEEI is associated with technical and/or structural changes which allow consumers to substitute oil, natural gas, and/or primary electricity for coal, and that shift energy use from final demand to intermediate sectors. Identifying the factors responsible for AEEI allows me to: (1) show that econometric efforts to measure technical change using a deterministic trend are inconsistent with economic theory and cannot be interpreted reliably; (2) show that modeling technical change with a deterministic trend may generate forecasts that overstate reductions in energy use and carbon emissions; and (3) test the observational record for the presence of price-induced technical change and its effect on economic growth. Together, the results indicate that current estimates for AEEI may overstate future reductions in energy use and that the economic impacts of policies to reduce energy use and slow emissions may have a greater effect on economic growth than anticipated currently.

Suggested Citation

  • Robert K. Kaufmann, 2004. "The Mechanisms for Autonomous Energy Efficiency Increases: A Cointegration Analysis of the US Energy/GDP Ratio," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 63-86.
    • Handle: RePEc:aen:journl:2004v25-01-a04
    as

    Download full text from publisher

    File URL: http://www.iaee.org/en/publications/ejarticle.aspx?id=1426
    Download Restriction: Access to full text is restricted to IAEE members and subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. J. Stephen Clark & Curtis E. Youngblood, 1992. "Estimating Duality Models with Biased Technical Change: A Time Series Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(2), pages 353-360.
    2. Granger, C. W. J. & Newbold, P., 1974. "Spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 2(2), pages 111-120, July.
    3. Hongil Lim & C. Richard Shumway, 1997. "Technical Change and Model Specification: U.S. Agricultural Production," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(2), pages 543-554.
    4. Alan S. Manne & Richard G. Richels, 1999. "The Kyoto Protocol: A Cost-Effective Strategy for Meeting Environmental Objectives?," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 1-23.
    5. Stern, David I., 2000. "A multivariate cointegration analysis of the role of energy in the US macroeconomy," Energy Economics, Elsevier, vol. 22(2), pages 267-283, April.
    6. Alan Manne & Richard Richels, 1992. "Buying Greenhouse Insurance: The Economic Costs of CO2 Emission Limits," MIT Press Books, The MIT Press, edition 1, volume 1, number 026213280x, December.
    7. William W. Hogan & Dale W. Jorgenson, 1991. "Productivity Trends and the Cost of Reducing CO2 Emissions," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 67-86.
    8. Dermot Gately, 1992. "Imperfect Price-Reversibility of U.S. Gasoline Demand: Asymmetric Responses to Price Increases and Declines," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 179-208.
    9. Kaufmann, Robert K., 1994. "The relation between marginal product and price in US energy markets : Implications for climate change policy," Energy Economics, Elsevier, vol. 16(2), pages 145-158, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dowlatabadi, Hadi & Oravetz, Matthew A., 2006. "US long-term energy intensity: Backcast and projection," Energy Policy, Elsevier, vol. 34(17), pages 3245-3256, November.
    2. Moss, Charles B. & Erickson, Kenneth W. & Ball, V. Eldon & Mishra, Ashok K., 2003. "A Translog Cost Function Analysis Of U.S. Agriculture: A Dynamic Specification," 2003 Annual meeting, July 27-30, Montreal, Canada 22027, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Nour Wehbe & Bassam Assaf & Salem Darwich, 2018. "Étude de causalité entre la consommation d’électricité et la croissance économique au Liban," Post-Print hal-01944291, HAL.
    4. Hongbo Liu & Shuanglu Liang, 2019. "The Nexus between Energy Consumption, Biodiversity, and Economic Growth in Lancang-Mekong Cooperation (LMC): Evidence from Cointegration and Granger Causality Tests," IJERPH, MDPI, vol. 16(18), pages 1-15, September.
    5. Nordhaus, William, 2013. "Integrated Economic and Climate Modeling," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 1069-1131, Elsevier.
    6. Huang, Bwo-Nung & Hwang, M.J. & Yang, C.W., 2008. "Causal relationship between energy consumption and GDP growth revisited: A dynamic panel data approach," Ecological Economics, Elsevier, vol. 67(1), pages 41-54, August.
    7. Marvão Pereira, Alfredo & Marvão Pereira, Rui Manuel, 2010. "Is fuel-switching a no-regrets environmental policy? VAR evidence on carbon dioxide emissions, energy consumption and economic performance in Portugal," Energy Economics, Elsevier, vol. 32(1), pages 227-242, January.
    8. Lee, Chien-Chiang & Chang, Chun-Ping, 2008. "Energy consumption and economic growth in Asian economies: A more comprehensive analysis using panel data," Resource and Energy Economics, Elsevier, vol. 30(1), pages 50-65, January.
    9. Dimitropoulos, John, 2007. "Energy productivity improvements and the rebound effect: An overview of the state of knowledge," Energy Policy, Elsevier, vol. 35(12), pages 6354-6363, December.
    10. Dagher, Leila & Yacoubian, Talar, 2012. "The causal relationship between energy consumption and economic growth in Lebanon," Energy Policy, Elsevier, vol. 50(C), pages 795-801.
    11. Kamal Raj Dhungel, 2008. "A causal relationship between energy consumption and economic growth in Nepal," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 15(1), pages 137-150, June.
    12. Adil Najam & Cutler Cleveland, 2003. "Energy and Sustainable Development at Global Environmental Summits: An Evolving Agenda," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 5(1), pages 117-138, March.
    13. Robert K. Kaufmann & Cutler J. Cleveland, 2001. "Oil Production in the Lower 48 States: Economic, Geological, and Institutional Determinants," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 27-49.
    14. Erdogdu, Erkan, 2007. "Electricity demand analysis using cointegration and ARIMA modelling: A case study of Turkey," Energy Policy, Elsevier, vol. 35(2), pages 1129-1146, February.
    15. Amy K. Richmond & Robert K. Kaufmann, 2006. "Energy Prices and Turning Points: The Relationship between Income and Energy Use/Carbon Emissions," The Energy Journal, , vol. 27(4), pages 157-180, October.
    16. David I. Stern, 2010. "The Role of Energy in Economic Growth," CCEP Working Papers 0310, Centre for Climate & Energy Policy, Crawford School of Public Policy, The Australian National University.
    17. Paul Ekins, 1995. "Rethinking the costs related to global warming: A survey of the issues," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 6(3), pages 231-277, October.
    18. Esseghir, Asma & Haouaoui Khouni, Leila, 2014. "Economic growth, energy consumption and sustainable development: The case of the Union for the Mediterranean countries," Energy, Elsevier, vol. 71(C), pages 218-225.
    19. Sorrell, Steve, 2009. "Jevons' Paradox revisited: The evidence for backfire from improved energy efficiency," Energy Policy, Elsevier, vol. 37(4), pages 1456-1469, April.

    More about this item

    JEL classification:

    • F0 - International Economics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aen:journl:2004v25-01-a04. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: David Williams (email available below). General contact details of provider: https://edirc.repec.org/data/iaeeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.