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On the Mechanism of International Technology Diffusion for Energy Technological Progress

Listed author(s):
  • Wei Jin

    (School of Public Policy, Zhejiang University, Hangzhou, China)

  • ZhongXiang Zhang

    (School of Economics, Fudan University, Shanghai, China)

International diffusion of energy-saving technologies has received considerable attention in recent energy and climate economics studies. As a helpful methodological complement to the existing large-scale CGE/IAM–based modelling for energy and climate policy studies, this paper contributes to a transparent analytical model for an economically intuitive exposition on the fundamental mechanism of international technology diffusion for energy technological growth. We first develop an efficiency-improving vertical innovation model where energy technological progress is specified as an improvement in primary energy use efficiency. Then a variety-expanding horizontal innovation model is presented where energy technological progress is described as an expansion of energy technology variety. We show that in both models there is a cross-country convergence in the growth rate of energy technology in a long-run balanced growth path, but the absolute levels of energy technology tend to diverge due to cross-country differences in indigenous innovation efficiencies and knowledge absorptive capacities. An economy with a stronger capacity of absorbing foreign knowledge diffusion and undertaking indigenous research tends to have a higher level of energy technology.

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Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2015.24.

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Date of creation: Mar 2015
Handle: RePEc:fem:femwpa:2015.24
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