Modelling a sector undergoing structural change: The case of Danish energy supply

Henrik Klinge Jacobsen

MPRA Paper from University Library of Munich, Germany

Abstract: This paper examines structural change in the power and heat producing sector (energy supply) and its implications for the economy. An integrated approach is used to describe the interactions between this sector and the rest of the economy. Thus, a very detailed model of the sector for Denmark has been linked to a macroeconometric model of the Danish economy. It is argued that analysing sectors that undergo radical changes, for example, the energy supply sector should be undertaken by using a model that describes the technological and organisational changes in production along with implications for the demand of the produced goods. Environmental priorities and targets for emission reductions are important for defining energy policy in Denmark. As the energy supply sector at present is a major contributor to emissions of CO2 and SO2, knowledge of this sector is vital for reducing these emissions. It is shown that quite substantial emission reductions are possible without encountering a substantial negative impact on the economy. The reduction potential through such economic incentives as fuel taxes is shown to be very sensitive to the technology used at present and in the future. This study also emphasises that the large reduction potential of emissions from the energy supply sector is a one-time gain. Fuel switching and increasing use of wind power cannot be repeated. Scenarios carried out with the combined model show that emission reduction in the energy supply sector will decrease the share of this sector in total emissions remarkably, and that the importance of the sector as a key element in any overall emission reduction strategy will decline.

Keywords: Energy sector; CO2 emissions; electricity price; technology investment; macroeconomic model (search for similar items in EconPapers)
JEL-codes: E6 L94 Q43 Q52 (search for similar items in EconPapers)
Date: 1998-03
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/42708/1/MPRA_paper_42708.pdf original version (application/pdf)

Related works:
Journal Article: Modelling a sector undergoing structural change: The case of Danish energy supply (2000)
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:pra:mprapa:42708

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().