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Induced technological change and energy efficiency improvements

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  • Witajewski-Baltvilks, Jan
  • Verdolini, Elena
  • Tavoni, Massimo

Abstract

We present a theoretical and empirical model which (1) shows that the demand for energy is shifted down by innovations in energy intensive sectors and (2) highlights the drivers of innovative activity in these sectors. The theoretical model and the empirical analysis of patent and energy data indicate that the level of innovative activity is determined by energy expenditure as well as international and inter-temporal spillovers. The solution of the theoretical model along the balanced growth path suggests that in general equilibrium the level of innovative activity depends on the growth rate of energy generation cost. The model predicts also that a level increase in the cost of energy does not alter the long-run energy share of income. Finally, we show that our results can be used to calibrate Integrated Assessment Models to project energy efficiency growth.

Suggested Citation

  • Witajewski-Baltvilks, Jan & Verdolini, Elena & Tavoni, Massimo, 2017. "Induced technological change and energy efficiency improvements," Energy Economics, Elsevier, vol. 68(S1), pages 17-32.
  • Handle: RePEc:eee:eneeco:v:68:y:2017:i:s1:p:17-32
    DOI: 10.1016/j.eneco.2017.10.032
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    Cited by:

    1. Galeotti, Marzio & Salini, Silvia & Verdolini, Elena, 2020. "Measuring environmental policy stringency: Approaches, validity, and impact on environmental innovation and energy efficiency," Energy Policy, Elsevier, vol. 136(C).
    2. Colmenares, Gloria & Löschel, Andreas & Madlener, Reinhard, 2019. "The rebound effect and its representation in energy and climate models," CAWM Discussion Papers 106, University of Münster, Center of Applied Economic Research Münster (CAWM).

    More about this item

    Keywords

    Energy efficiency; Directed technological change; Induced innovations; Patents;

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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