Estimating Path Dependence in Energy Transitions
No 1539, 2019 Meeting Papers from Society for Economic Dynamics
How can an economy transition from dirty to clean inputs? When transitional dynamics exhibit strong path dependence, a temporary shock to input composition can trigger permanent structural change. This paper examines whether such dynamics characterize the U.S. energy sector’s use of coal - the most climate-damaging energy input - over the 20th century. Exploiting local coal transport distance shocks driven by the changing regional accessibility of subsurface coal resources, I find increasing imbalance in the coal composition of electricity capital lasting ten decades following a shock. Additional tests detect increasing returns to scale as the underlying mechanism. To inform energy transitions more broadly, I develop a model of scale-driven structural change to map reduced-form estimates onto a key parameter found across a class of structural change models. Calibrated model simulations further characterize conditions under which a temporary climate policy can trigger a permanent future transition towards clean energy.
New Economics Papers: this item is included in nep-ene, nep-his and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Working Paper: Estimating Path Dependence in Energy Transitions (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:red:sed019:1539
Access Statistics for this paper
More papers in 2019 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().