Fossil Fuels, Backstop Technologies, and Imperfect Substitution

Research output: Chapter in Book / Report / Conference proceedingChapterAcademicpeer-review

Abstract

This chapter studies the transition from fossil fuels to backstop technologies in a general equilibrium model in which growth is driven by research and development. The analysis generalizes the existing literature by allowing for imperfect substitution between fossil fuels and the new energy generation technologies. It is shown that the degree of substitutability is important for the macroeconomic repercussions of the energy transition. In contrast to the perfect substitutes case, the model does not generate abrupt regime shifts, but features a prolonged period of simultaneous use of both energy sources. By inducing front-loading of fossil fuel extraction, the availability of a backstop technology leads to a Green Paradox. The model also gives rise to a `Weak Green Orthodox': an invention that increases the substitutability between fossil fuels and the backstop technology leads to a short-run decrease in fossil fuel combustion.
LanguageEnglish
Title of host publicationClimate Policy and Nonrenewable Resources: The Green Paradox and Beyond
EditorsKaren Pittel, Frederick van der Ploeg, Cees Withagen
Place of PublicationCambridge, Massachusetts
PublisherMIT Press
Pages87-120
Number of pages33
ISBN (Print)9780262027885
DOIs
Publication statusPublished - 1 Jan 2014

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fossil fuel
substitution
macroeconomics
research and development
energy
combustion

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van der Meijden, G. C. (2014). Fossil Fuels, Backstop Technologies, and Imperfect Substitution. In K. Pittel, F. van der Ploeg, & C. Withagen (Eds.), Climate Policy and Nonrenewable Resources: The Green Paradox and Beyond (pp. 87-120). [5] Cambridge, Massachusetts: MIT Press. https://doi.org/10.7551/mitpress/9780262027885.001.0001
van der Meijden, G.C. / Fossil Fuels, Backstop Technologies, and Imperfect Substitution. Climate Policy and Nonrenewable Resources: The Green Paradox and Beyond. editor / Karen Pittel ; Frederick van der Ploeg ; Cees Withagen. Cambridge, Massachusetts : MIT Press, 2014. pp. 87-120
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van der Meijden, GC 2014, Fossil Fuels, Backstop Technologies, and Imperfect Substitution. in K Pittel, F van der Ploeg & C Withagen (eds), Climate Policy and Nonrenewable Resources: The Green Paradox and Beyond., 5, MIT Press, Cambridge, Massachusetts, pp. 87-120. https://doi.org/10.7551/mitpress/9780262027885.001.0001

Fossil Fuels, Backstop Technologies, and Imperfect Substitution. / van der Meijden, G.C.

Climate Policy and Nonrenewable Resources: The Green Paradox and Beyond. ed. / Karen Pittel; Frederick van der Ploeg; Cees Withagen. Cambridge, Massachusetts : MIT Press, 2014. p. 87-120 5.

Research output: Chapter in Book / Report / Conference proceedingChapterAcademicpeer-review

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van der Meijden GC. Fossil Fuels, Backstop Technologies, and Imperfect Substitution. In Pittel K, van der Ploeg F, Withagen C, editors, Climate Policy and Nonrenewable Resources: The Green Paradox and Beyond. Cambridge, Massachusetts: MIT Press. 2014. p. 87-120. 5 https://doi.org/10.7551/mitpress/9780262027885.001.0001