Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2014-08-18
Number: 14-108/VIII
Author-Name: Gerard van der Meijden
Author-Workplace-Name: VU University Amsterdam
Author-Name: Sjak Smulders
Author-Workplace-Name: Tilburg University, the Netherlands
Title: Technological Change during the Energy Transition
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 place if the return to innovation becomes too low.
Classification-JEL: O30, Q32, Q42, Q56
Keywords: Alternative energy sources, endogenous growth, energy transition, non-renewable resources, technological change
File-Url: https://papers.tinbergen.nl/14108.pdf
File-Format: application/pdf
File-Size: 1420928 bytes
Handle: RePEc:tin:wpaper:20140108