Energy-Saving Technical Change

Hassler, John; Krusell, Per; Olovsson, Conny

doi:10.3386/w18456

Cited by 118 publications

(148 citation statements)

References 43 publications

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“…proposed by Saunders (1992), Petith (2008), and Hassler et al (2012). Our model is also somewhat similar to Fröling's (2011) unified growth model.…”

Section: Model and Methodssupporting

confidence: 68%

Economic Growth and the Transition from Traditional to Modern Energy in Sweden

Kander

Stern

2013

SSRN Journal

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We examine the role of substitution from traditional to modern energy carriers and of differential rates of innovation in the use of each of these in Sweden from 1850 to 1950. We use a simple growth model with a nested CES production function and exogenous factor augmenting technological change and carry out a growth accounting decomposition based on the econometric results. Energy and energy augmenting technological change contributed more than a third of the economic growth in this period. Even though the rate of technical change was much larger for modern energy, innovation in the use of traditional energy carriers contributed more to growth between 1850 and 1890, since the cost share of traditional energy was so much larger than that of modern energy in that period. However, after 1890 we find that modern energy contributed much more to economic growth than traditional energy, but increasingly labor augmenting technological change and capital accumulation became the most important drivers of growth in the final decades of the period. | T H E A U S T R A L I A N N A T I O N A L U N I V E R S I T Y Keywords JEL ClassificationO13, O41, Q43, N13, N14 Address for correspondence:(E) cama.admin@anu.edu.auThe Centre for Applied Macroeconomic Analysis in the Crawford School of Public Policy has been established to build strong links between professional macroeconomists. It provides a forum for quality macroeconomic research and discussion of policy issues between academia, government and the private sector.The Crawford School of Public Policy is the Australian National University's public policy school, serving and influencing Australia, Asia and the Pacific through advanced policy research, graduate and executive education, and policy impact. | T H E A U S T R A L I A N N A T I O N A L U N I V E R S I T Y AbstractWe examine the role of substitution from traditional to modern energy carriers and of differential rates of innovation in the use of each of these in Sweden from 1850 to 1950. We use a simple growth model with a nested CES production function and exogenous factor augmenting technological change and carry out a growth accounting decomposition based on the econometric results. Energy and energy augmenting technological change contributed more than a third of the economic growth in this period. Even though the rate of technical change was much larger for modern energy, innovation in the use of traditional energy carriers contributed more to growth between 1850 and 1890, since the cost share of traditional energy was so much larger than that of modern energy in that period. However, after 1890 we find that modern energy contributed much more to economic growth than traditional energy, but increasingly labor augmenting technological change and capital accumulation became the most important drivers of growth in the final decades of the period. JEL Codes: O13, O41, Q43, N13, N14 Acknowledgements:We thank the Australian Research Council for support under Discovery grant DP120101088: "Energy Transitions: Pa...

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“…proposed by Saunders (1992), Petith (2008), and Hassler et al (2012). Our model is also somewhat similar to Fröling's (2011) unified growth model.…”

Section: Model and Methodssupporting

confidence: 68%

Economic Growth and the Transition from Traditional to Modern Energy in Sweden

Kander

Stern

2013

SSRN Journal

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“…For this reason, intermittent renewable electricity production relies on a buffer of conventional generation to balance the grid. In this setting, limited storage solutions imply that conventional electricity Hassler et al (2012).…”

Section: Theoretical Frameworkmentioning

confidence: 99%

From fossil fuels to renewables: The role of electricity storage

Lazkano

Pelli

2017

European Economic Review

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We analyze the role of electricity storage for technological innovations in electricity generation. We propose a directed technological change model of the electricity sector, where innovative firms develop better electricity storage solutions, which affect not only the relative competitiveness between renewable and nonrenewable electricity sources but also the ease with which they can be substituted. Using a global firm-level data set of electricity patents from 1963 to 2011, we empirically analyze the determinants of innovation in electricity generation, and the role of storage in directing innovation. Our results show that electricity storage increases innovation not only in renewables but also in conventional technologies. This implies that efforts to increase innovation in storage can benefit conventional, fossil fuel-fired electricity plants as well as increasing the use of renewable electricity.

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“…Such technologies arise when less fossil fuel energy inputs are used in favour of more capital in response to, say, a tax on the use of fossil fuel. However, empirical evidence suggests that there is limited substitutability between energy and capital and labour (Hassler et al 2012) in which case fossil fuel use is proportional to aggregate output. More specifically, fossil fuel use is given by γ 0 (1 − r γ ) t GDP t where the initial energy intensity γ 0 is calibrated at 0.15 GtC per trillion dollars of world GDP (cf.…”

Section: End Of Carbon Era and Peak Warmingmentioning

confidence: 99%

The simple arithmetic of carbon pricing and stranded assets

Ploeg

Rezai

2017

Energy Efficiency

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A simple rule for the optimal global price of carbon is presented, which captures the geophysical, economic, and ethical drivers of climate policy as well as the effect of uncertainty about future growth of consumption. There is also a discussion of the optimal carbon budget and the amount of unburnable carbon and stranded fossil fuel reserves and a back-on-theenvelope expression are given for calculating these. It is also shown how one can derive the end of the carbon era and peak warming. This simple arithmetic for determining climate policy is meant to complement the simulations of large-scale integrated assessment model, and to give analytical understanding of the key determinants of climate policy. The simple rules perform very well in a full integrated assessment model. It is also shown how to take account of a 2°C upper limit on global warming. Steady increases in energy efficiency do not affect the optimal price of carbon, but postpone the carbon-free era somewhat and if technical progress in renewables and economic growth are strong leads to substantially lower cumulative emissions and lower peak global warming.Keywords Social cost of carbon . Carbon budget . Peak warming . End of carbon era JEL codes H21 . Q51 . Q54

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Energy-Saving Technical Change

Cited by 118 publications

References 43 publications

Economic Growth and the Transition from Traditional to Modern Energy in Sweden

Economic Growth and the Transition from Traditional to Modern Energy in Sweden

From fossil fuels to renewables: The role of electricity storage

The simple arithmetic of carbon pricing and stranded assets

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