Directed Technical Change and Energy Intensity Dynamics: Structural Change vs. Energy Efficiency

Christian Haas and Karol Kempa
Additional contact information
Christian Haas: University of Giessen

MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

Abstract: This paper uses a model with Directed Technical Change to theoretically analyse observable heterogeneous energy intensity developments. Based on the empirical evidence, we decompose changes in aggregate energy intensity into structural changes in the economy (structural effect) and within-sector energy effciency improvements (effciency effect). The relative importance of these effects is determined by energy price growth and sectoral productivities that drive the direction of technical change. When research is directed to the labour-intensive sector, the structural effect is the main driver of energy intensity dynamics. In contrast, the effciency effect dominates energy intensity developments, when research is directed to energy-intensive industries. Increasing energy price generally leads to lower energy intensities and temporal energy price shocks might induce a permanent redirection of innovation activities. We calibrate the model to empirical data and simulate energy intensity developments across countries. The results of our very stylised model are largely consistent with empirical evidence.

Keywords: directed technical change; energy efficiency; energy intensity; structural change (search for similar items in EconPapers)
JEL-codes: O33 O41 Q43 Q55 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2016
New Economics Papers: this item is included in nep-eff, nep-ene, nep-ino and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Directed Technical Change and Energy Intensity Dynamics: Structural Change vs. Energy Efficiency (2018)
Journal Article: Directed Technical Change and Energy Intensity Dynamics: Structural Change vs. Energy Efficiency (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:mar:magkse:201610

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