Competing land uses and fossil fuel, and optimal energy conversion rates during the transition toward a green economy under a pollution stock constraint

Jean-Pierre Amigues and Michel Moreaux

Journal of Environmental Economics and Management, 2019, vol. 97, issue C, 92-115

Abstract: We study the transition to a carbon-free economy in a model with a polluting non-renewable resource and a clean renewable resource. Transforming primary energy into ready-to-use energy services is costly and more efficient energy transformation rates are more costly to achieve. Renewable energy competes with food production for land and the food productivity of land can be improved at some cost. To avoid catastrophic climate damages, the pollution stock is mandated to stay below a given cap. When the economy is not constrained by the cap, the efficiency of energy transformation increases steadily until the transition toward the ultimate green economy; when renewable energy is exploited, its land use rises at the expense of food production; food productivity increases together with the land rent but food production drops; the food and energy prices increase and renewables substitute for non-renewable energy. During the constrained phase, the economy follows a constant path of prices, quantities, efficiency rates, food productivity and land rent, a phenomenon we call the ‘ceiling efficiency paradox’.

Keywords: Energy efficiency; Carbon pollution; Non-renewable resources; Renewable resources; Land uses (search for similar items in EconPapers)
JEL-codes: Q00 Q32 Q43 Q54 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (14)

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Working Paper: Competing land uses and fossil fuel, and optimal energy conversion rates during the transition toward a green economy under a pollution stock constraint (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:97:y:2019:i:c:p:92-115

DOI: 10.1016/j.jeem.2019.03.006

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