Energy in Economic Growth: Is Faster Growth Greener?
No 208, Working Papers from Department of Economics, SOAS, University of London, UK
An influential theoretical hypothesis holds that if aggregate productivity growth accelerates, then so does the decline in energy intensity. Whether faster growth is greener in this sense is crucial for modeling future growth and climate change mitigation, but empirical evidence is lacking. This paper characterizes the global, long-run historical relationship between changes in energy intensity and labor productivity growth rates. Basing estimates on an unbalanced panel of 180 countries for the period 1950-2014 and the world as a whole, it captures a significantly larger historical window than previous studies. The paper finds a stylized fact whereby the rate at which energy intensity changes is constant or even increases as labor productivity accelerates. Faster growth is not greener. This provides important new information for calibrating integrated assessment models, many of which make a green growth assumption in near term projections.
Keywords: energy intensity; labor productivity; decoupling; green growth; stylized fact (search for similar items in EconPapers)
JEL-codes: O44 O47 Q43 E17 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eff, nep-ene, nep-env, nep-his and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:soa:wpaper:208
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