Converting Primary Resources into Useful Energy: The Pollution Ceiling Efficiency Paradox

Jean-Pierre Amigues and Michel Moreaux

Annals of Economics and Statistics, 2018, issue 132, 5-32

Abstract: We study an economy producing energy services from a polluting fossil fuel and a carbon free renewable resource under a constraint on the admissible atmospheric carbon concentration, equivalently under a constraint on the admissible temperature. The transformation rates of natural primary resources energy into useful energy are costly endogenous variables. Choosing higher efficiency rates requires to bring into operation more sophisticated energy transformation devices, that is more costly ones. We show that, independently of technical progress, along an optimal path, the transformation rate of any exploited resource should increase throughout time, excepted within the period during which the carbon constraint is binding, a phenomenon we call the ‘ceiling paradox’. The effects of technical progress in the fossil fuel and the renewable energy sectors are strongly contrasted. JEL Codes: Q00, Q32, Q43, Q54. Keywords: Energy Efficiency, Carbon Pollution, Non-Renewable Resources, Renewable Resources.

Keywords: Energy Efficiency; Carbon Pollution; Non-Renewable Resources; Renewable Resources. (search for similar items in EconPapers)
JEL-codes: Q00 Q32 Q43 Q54 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Converting primary resources into useful energy: The pollution ceiling efficiency paradox (2018)
Working Paper: Converting Primary Resources Into Useful Energy: The Pollution Ceiling Efficiency Paradox (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:adr:anecst:y:2018:i:132:p:5-32

DOI: 10.15609/annaeconstat2009.132.0005

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