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Energy Saving Technological Progress in a Vintage Capital Model


    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

  • Benteng, ZOU

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

Fossil fuel is an essential input throughout all modern economies. The reduced availability of this basic input to production, and the stabilization of greenhouse gases concentration - which requires reductions in fossil fuel energy use - would have a negative impact in GDP and economic growth through cutbacks in energy use. However, this trade-off between energy reduction and growth could be less severe if energy conservation is raised by ernergy saving technologies. Here we study this hypothesis and, in particular, the effect of tax over the energy expenditure of firms as a way to promote investments in energy saving technologies. To this we consider a general equilibrium model with embodied and exogenous energy saving technological progress in a vintage capital framework, where the scrapping rule is endogenous and linear simplifications are eliminated.

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Paper provided by Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) in its series Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) with number 2003026.

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Length: 39
Date of creation: 01 Dec 2003
Date of revision:
Handle: RePEc:ctl:louvir:2003026
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  1. Brown, Stephen P. A. & Yucel, Mine K., 2002. "Energy prices and aggregate economic activity: an interpretative survey," The Quarterly Review of Economics and Finance, Elsevier, vol. 42(2), pages 193-208.
  2. Richard G. Newell & Adam B. Jaffe & Robert N. Stavins, 1999. "The Induced Innovation Hypothesis and Energy-Saving Technological Change," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 941-975.
  3. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
  4. BOUCEKKINE, Raouf & GERMAIN, Marc & LICANDRO, Omar, 1996. "General Equilibrium Vintage Capital Growth Models Displaying Periodic Solutions : A Theoretical Example," CORE Discussion Papers 1996032, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  5. Ansuategi, Alberto & Escapa, Marta, 2002. "Economic growth and greenhouse gas emissions," Ecological Economics, Elsevier, vol. 40(1), pages 23-37, January.
  6. Loschel, Andreas, 2002. "Technological change in economic models of environmental policy: a survey," Ecological Economics, Elsevier, vol. 43(2-3), pages 105-126, December.
  7. Raouf Boucekkine & David de la Croix & Omar Licandro, 2006. "Vintage Capital," Economics Working Papers ECO2006/8, European University Institute.
  8. Boucekkine, R. & Germain, M. & Licandro, O., . "Replacement echoes in the vintage capital growth model," CORE Discussion Papers RP 1275, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  9. Carraro, Carlo & Gerlagh, Reyer & Zwaan, Bob van der, 2003. "Endogenous technical change in environmental macroeconomics," Resource and Energy Economics, Elsevier, vol. 25(1), pages 1-10, February.
  10. BOUCEKKINE, Raouf & GERMAIN, Marc & LICANDRO, Omar & MAGNUS, Alphonse, . "Creative destruction, investment volatility, and the average age of capital," CORE Discussion Papers RP 1376, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  11. Buonanno, Paolo & Carraro, Carlo & Galeotti, Marzio, 2003. "Endogenous induced technical change and the costs of Kyoto," Resource and Energy Economics, Elsevier, vol. 25(1), pages 11-34, February.
  12. den Elzen, Michel G. J. & de Moor, Andre P. G., 2002. "Analyzing the Kyoto Protocol under the Marrakesh Accords: economic efficiency and environmental effectiveness," Ecological Economics, Elsevier, vol. 43(2-3), pages 141-158, December.
  13. Boucekkine, Raouf & Pommeret, Aude, 2004. "Energy saving technical progress and optimal capital stock: the role of embodiment," Economic Modelling, Elsevier, vol. 21(3), pages 429-444, May.
  14. Feijoo, Maria L. & Franco, Juan F. & Hernandez, Jose M., 2002. "Global warming and the energy efficiency of Spanish industry," Energy Economics, Elsevier, vol. 24(4), pages 405-423, July.
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