Energy mix, technological change, and the environment

Anelí Bongers

No 2020-05, Working Papers from Universidad de Málaga, Department of Economic Theory, Málaga Economic Theory Research Center

Abstract: This paper studies the relationship between the energy mix and the environment using a theoretical framework in which two alternative energy sources are considered: fossil fuels (dirty energy) and renewable energy (clean energy). We find that a positive aggregate productivity shock increases energy consumption and emissions but reduces energy intensity and emissions per unit of output as renewable energy consumption increases, that is, carbon emissions are procyclical but emissions per unit of output are countercyclical. Second, an energy efficiency improvement provokes a ``rebound effect'' above $100\%$ (the backfire effect), resulting in a rise of pollutant emissions by increasing energy use. Third, a technological improvement in emissions leads to a reduction in emissions per unit of fossil fuel but also implies a slow-down in the adoption of renewable energy sources. Finally, we also study the effects of a price shock to the pollutant energy, resulting in a substitution of the ``dirty'' by the ``clean'' energy, leading to a decline in energy consumption and emissions but at the cost of decreasing output.

Keywords: Energy mix; Emissions; Fossil fuels; Renewable energy; Technological change (search for similar items in EconPapers)
JEL-codes: Q41 Q42 Q43 Q52 Q55 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2020-07
New Economics Papers: this item is included in nep-ene, nep-env and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://theeconomics.uma.es/malagawpseries/Papers/METCwp2020-5.pdf First version, 2020 (application/pdf)

Related works:
Journal Article: Energy mix, technological change, and the environment (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mal:wpaper:2020-5

Access Statistics for this paper

More papers in Working Papers from Universidad de Málaga, Department of Economic Theory, Málaga Economic Theory Research Center Contact information at EDIRC.
Bibliographic data for series maintained by Ascension Andina ().