Technical change during the energy transition
van der Meijden,G.C. Smulders,Sjak
van der Meijden,G.C.
Smulders,Sjak
Abstract
The energy transition from fossil fuels to alternative energy sources has important consequences for technological change and resource extraction. We examine these consequences by incorporating a non-renewable resource and an alternative energy source in a market economy model of endogenous growth through expanding varieties. During the energy transition, technological progress is non-monotonic over time: it declines initially, starts increasing when the economy approaches the regime shift, and jumps down once the resource stock is exhausted. A moment of peak-oil does no longer necessarily occur, and simultaneous use of the resource and the alternative energy source will take lace if the return to innovation becomes too low. Subsidies to research and development (R&D) and to renewables production speed up the energy transition, whereas a tax on fossil fuels postpones the switch to renewable energy.
Description
Date
2018-06
Journal Title
Journal ISSN
Volume Title
Publisher
Research Projects
Organizational Units
Journal Issue
Keywords
alternative energy sources, endogenous growth, energy transition, nonrenewable resources, technological change, SDG 7 - Affordable and Clean Energy, SDG 8 - Decent Work and Economic Growth
Citation
van der Meijden, G C & Smulders, S 2018, 'Technical change during the energy transition', Macroeconomic Dynamics, vol. 22, no. 4, pp. 805-836. https://doi.org/10.1017/S1365100516000419