 The economic power of energy and the need to integrate it with energy policyReiner Kümmel, Dietmar Lindenberger and Florian Weiser Energy Policy, 2015, vol. 86, issue C, 833-843 Abstract: Drastic oil price changes, the associated economic perturbations, the coupling of energy conversion to entropy production in the form of emissions, and the problems of climate change call for a reappraisal of energy in economic theory. We review econometric growth analyses that do not weigh the production factors capital, labor, and energy by their cost shares. Their reproduction of economic growth in Germany, Japan, and the USA during the second half of 20th century is good. According to these analyses, energy's output elasticity, which measures its economic power, is much larger than energy's share in total factor cost, while for labor's output elasticity and cost share the opposite is true. This is consistent with profit and welfare optimization, if hitherto ignored technological constraints are taken into account. Computing the motion of the German industrial sector in its cost mountain, employing empirical data on factor quantities and prices, supports these results. The pivotal role of energy in economic growth provides leverage to energy policies that care about social well being and climate stability. Keywords: Energy conversion; Output elasticities; Economic growth; Profit optimization; Technological constraints; Cost mountain (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:86:y:2015:i:c:p:833-843 DOI: 10.1016/j.enpol.2015.07.026 Access Statistics for this article Energy Policy is currently edited by N. France More articles in Energy Policy from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.