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Fossil fuel producing economies have greater potential for industrial interfuel substitution

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  • Steinbuks, Jevgenijs
  • Narayanan, Badri G.

Abstract

This study analyzes industrial interfuel substitution in an international context using a large unbalanced panel dataset of 63 countries. We find that compared to other countries fossil fuel producing economies have higher short-term interfuel substitution elasticities. This difference increases further in the long run as fossil fuel producing countries have a considerably longer adjustment of their fuel-using capital stock. These results imply lower economic cost for policies aimed at climate abatement and more efficient utilization of energy resources in energy-intensive economies.

Suggested Citation

  • Steinbuks, Jevgenijs & Narayanan, Badri G., 2015. "Fossil fuel producing economies have greater potential for industrial interfuel substitution," Energy Economics, Elsevier, vol. 47(C), pages 168-177.
  • Handle: RePEc:eee:eneeco:v:47:y:2015:i:c:p:168-177
    DOI: 10.1016/j.eneco.2014.11.001
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    1. repec:eee:enepol:v:109:y:2017:i:c:p:181-190 is not listed on IDEAS
    2. Suh, Dong Hee, 2016. "Interfuel substitution and biomass use in the U.S. industrial sector: A differential approach," Energy, Elsevier, vol. 102(C), pages 24-30.
    3. Christoph Böhringer & Florian Landis & Miguel Angel Tovar Reaños, 2016. "Cost-effectiveness and Incidence of Renewable Energy Promotion in Germany," Working Papers V-390-16, University of Oldenburg, Department of Economics, revised Jul 2016.
    4. Zhang, Cheng & Wang, Qunwei & Shi, Dan & Li, Pengfei & Cai, Wanhuan, 2016. "Scenario-based potential effects of carbon trading in China: An integrated approach," Applied Energy, Elsevier, vol. 182(C), pages 177-190.
    5. repec:aen:journl:ej38-si1-bohringer is not listed on IDEAS
    6. repec:eee:eneeco:v:71:y:2018:i:c:p:370-382 is not listed on IDEAS

    More about this item

    Keywords

    Dynamic linear logit; Fossil fuel production; Industrial energy demand; International interfuel substitution;

    JEL classification:

    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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