Estimating Path Dependence in Energy Transitions

Kyle Meng

No 22536, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: What induces clean energy transitions? When transitional dynamics exhibit strong path dependence, a temporary shock to input composition can trigger permanent structural change. I examine whether such dynamics characterize the U.S. electricity sector’s use of coal - the most climate-damaging fuel - across the 20th century. Exploiting local coal supply shocks driven by changing regional accessibility of subsurface coal, I find increasing imbalance in the coal composition of electricity capital lasting ten decades following a shock. A structural change model enables recovery of a key substitution parameter from reduced-form estimates and explores conditions for triggering sustained future clean energy transitions.

JEL-codes: N51 N52 O41 Q35 Q43 Q54 Q58 (search for similar items in EconPapers)
Date: 2016-08
New Economics Papers: this item is included in nep-cmp, nep-ene and nep-env
Note: DAE EEE EFG PE
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Citations: View citations in EconPapers (9)

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Working Paper: Estimating Path Dependence in Energy Transitions (2019)
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