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Energy consumption and energy R&D in OECD: Perspectives from oil prices and economic growth

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  • Leng Wong, Siang
  • Chia, Wai-Mun
  • Chang, Youngho

Abstract

We estimate the short-run and long-run elasticities of various types of energy consumption and energy R&D to changes in oil prices and income of the 20 OECD countries over the period of 1980–2010 using the Nerlove partial adjustment model (NPAM). We find negative income elasticity for coal consumption but positive income elasticity for oil and gas consumption suggesting the importance of economic growth in encouraging the usage of cleaner energy from coal to oil and gas. By introducing time dummies into the regressions, we show that climatic mitigation policies are able to promote the usage of cleaner energies. Through the dynamic linkages between energy consumption and energy R&D, we find that fossil fuel consumption promotes fossil fuel R&D and fossil fuel R&D in turn drives its own consumption. Renewable energy R&D which is more responsive to economic growth reduces fossil fuel consumption and hence fossil fuel R&D.

Suggested Citation

  • Leng Wong, Siang & Chia, Wai-Mun & Chang, Youngho, 2013. "Energy consumption and energy R&D in OECD: Perspectives from oil prices and economic growth," Energy Policy, Elsevier, vol. 62(C), pages 1581-1590.
  • Handle: RePEc:eee:enepol:v:62:y:2013:i:c:p:1581-1590
    DOI: 10.1016/j.enpol.2013.07.025
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    References listed on IDEAS

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    Cited by:

    1. repec:eee:rensus:v:81:y:2018:i:p2:p:2335-2342 is not listed on IDEAS
    2. Long, Xingle & Naminse, Eric Yaw & Du, Jianguo & Zhuang, Jincai, 2015. "Nonrenewable energy, renewable energy, carbon dioxide emissions and economic growth in China from 1952 to 2012," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 680-688.
    3. Isabelle Cadoret & Fabio Padovano, 2016. "The political drivers of renewable energies policies," Post-Print halshs-01290360, HAL.
    4. Isabelle CADORET & Fabio PADOVANO, 2015. "The Political Economy of Renewable Energies," Economics Working Paper from Condorcet Center for political Economy at CREM-CNRS 2015-01-ccr, Condorcet Center for political Economy.

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