TECHNOLOGICAL CHANGE during the ENERGY TRANSITION

Gerard van der Meijden, Sjak Smulders

Research output: Contribution to JournalArticleAcademicpeer-review

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 nonrenewable resource and an alternative energy source in a market economy model of endogenous growth through expanding varieties. During the energy transition, technological progress is nonmonotonic 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 place 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.

LanguageEnglish
Pages805-836
Number of pages32
JournalMacroeconomic Dynamics
Volume22
Issue number4
DOIs
StatePublished - 1 Jun 2018

Fingerprint

Energy sources
Energy
Alternative energy
Fossil fuels
Resources
Peak oil
Non-renewable resources
Tax
Endogenous growth
Renewable energy
Jump
Market economy
Subsidies
Innovation
Technological progress
Regime shift
Resource extraction
Technological change

Keywords

  • Alternative Energy Sources
  • Endogenous Growth
  • Energy Transition
  • Nonrenewable Resources
  • Technological Change

Cite this

van der Meijden, Gerard ; Smulders, Sjak. / TECHNOLOGICAL CHANGE during the ENERGY TRANSITION. In: Macroeconomic Dynamics. 2018 ; Vol. 22, No. 4. pp. 805-836
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TECHNOLOGICAL CHANGE during the ENERGY TRANSITION. / van der Meijden, Gerard; Smulders, Sjak.

In: Macroeconomic Dynamics, Vol. 22, No. 4, 01.06.2018, p. 805-836.

Research output: Contribution to JournalArticleAcademicpeer-review

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