Can technological progress in renewable energy sustain an age of cheap energy?

Hazuki Ishida ()
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Hazuki Ishida: Faculty of Symbiotic Systems Science, Fukushima University

No 10-16, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: The fact that harnessing renewable energy depends heavily upon fossil fuels implies that a continuous rise in energy prices is inevitable without technological progress in saving fossil fuel use. Using a simple Hotelling model of optimal nonrenewable resource extraction, this paper explores the conditions under which the continuous price rise of renewable energy is restrained in the presence of technological progress in harnessing renewable energy. In these circumstances, the results show that the growth rate of technology in harnessing renewable energy has to be larger than the discount rate to sustain the age of cheap energy.

Keywords: renewable energy; fossil fuels; technological progress (search for similar items in EconPapers)
JEL-codes: Q31 Q41 Q42 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2010-05
New Economics Papers: this item is included in nep-ene and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:osk:wpaper:1016

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