Energy-Saving Technology Shocks, Emissions, and the Macroeconomy

Emanuel Moench and Soroosh Soofi Siavash

No 19656, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We use restrictions derived from frontier models of directed technical change to identify an energy-saving technology shock in a Bayesian structural VAR of the U.S. economy. This shock is associated with a persistent reduction of the carbon intensity of output. It also leads to a delayed but strong increase of GDP which gives rise to substantial additional fossil fuel consumption and new emissions. As a result, per capita emissions fully rebound after an initial decline. These effects can largely be attributed to a substitution of fossil fuel end-use by electricity, much of which has historically been generated using fossil fuels.

Keywords: Energy-saving technology shocks; Carbon emissions; Structural vector autoregressions (search for similar items in EconPapers)
JEL-codes: C32 O47 Q43 Q55 (search for similar items in EconPapers)
Date: 2024-11
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