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Energy consumption, technological progress and economic policy

Author

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  • Théophile, AZOMAHOU

    (BETA, Université Louis Pasteur, Srasbourg)

  • Raouf, BOUCEKKINE

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and UNIVERSITE CATHOLIQUE DE LOUVAIN, Center for Operations Research and Econometrics (CORE))

  • Phu, NUYEN VAN

    (BETA, Université Louis Pasteur, Strasbourg)

Abstract

We first provide an empirical sstudy of the energy-saving technological progress on the ENERDATA database. Energy intensity is shown to decrease over the period 1971-1999 in OECD countries, indicating a significant energy-saving technical progress trend. We also show via semiparametric partially linear estimations that : (i) this trend is positively correlated with the investment rate, and (ii) the marginal productivity of investment has accelerated in the sub-period 1985-1999 compared to 1971-1984. Second, we build a general equilibrium vintage capital model with embodied energy-saving technical progress to formalize these findings. In this set-up, we study to which extent a steady increase in the marginal productivity of investment and/or scrapping subsidies could compensate the output loss due to a cut in energy use. The latter fiscal policy is shown to be particularly inefficient in this respect, even under rapid energy-saving technical progress. In the end, our model predicts that the implementation of Kyoto-like protocols in the computers age is much less painful than what it could have been two decades ago.

Suggested Citation

  • Théophile, AZOMAHOU & Raouf, BOUCEKKINE & Phu, NUYEN VAN, 2003. "Energy consumption, technological progress and economic policy," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2003025, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  • Handle: RePEc:ctl:louvir:2003025
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    File URL: http://sites.uclouvain.be/econ/DP/IRES/2003-25.pdf
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    References listed on IDEAS

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    Cited by:

    1. Burcu Afyonoglu Fazlioglu & Agustin Pérez-Barahona & Cagri Saglam, 2014. "The dynamic implications of energy-intensive capital accumulation," Working Papers hal-01074201, HAL.
    2. Francesco Ricci, 2007. "Environmental policy and growth when inputs are differentiated in pollution intensity," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 38(3), pages 285-310, November.
    3. Perez-Barahona, Agustin & Zou, Benteng, 2006. "A comparative study of energy saving technical progress in a vintage capital model," Resource and Energy Economics, Elsevier, vol. 28(2), pages 181-191, May.
    4. Agustin, PEREZ BARAHONA, 2007. "Capital Accumulation and Non-Renewable Energy Resources : a Special Functions Case," Discussion Papers (ECON - Département des Sciences Economiques) 2007008, Université catholique de Louvain, Département des Sciences Economiques.

    More about this item

    Keywords

    Economic growth; energy-saving technological progress; economic policy; vintage capital; modernization;

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

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