Unraveling the Drivers of Energy-saving Technical Change

Diego Känzig and Charles T. Williamson

No 34511, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We explore the increasing divergence between economic growth and energy consumption through energy-saving technical progress. Proposing a new measure of energy-saving technology, we study the underlying drivers in a semi-structural model of the U.S. economy. Our analysis shows that energy price shocks reduce consumption and stimulate energy-saving innovation, but also cause economic downturns and crowd out other innovations. Only energy-saving technology shocks can explain the negative co-movement between output and energy use. These sudden efficiency gains emerge as the primary driver of energy-saving technical change. Our findings highlight the importance of fostering energy-saving innovations in transitioning to a low-carbon economy.

JEL-codes: E0 O30 Q32 Q43 Q55 (search for similar items in EconPapers)
Date: 2025-11
New Economics Papers: this item is included in nep-eff, nep-ene and nep-tid
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Working Paper: Unraveling the drivers of energy-saving technical change (2024)
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