Technological Change During the Energy Transition

Tinbergen Institute Discussion Paper 14-108/VIII

34 Pages Posted: 20 Aug 2014

See all articles by Gerard van der Meijden

Gerard van der Meijden

Vrije Universiteit Amsterdam, School of Business and Economics

Sjak Smulders

Tilburg University - Center and Faculty of Economics and Business Administration; University of Calgary - Department of Economics

Date Written: August 18, 2014

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.

Keywords: alternative energy sources, endogenous growth, energy transition, non-renewable resources, technological change

JEL Classification: O30, Q32, Q42, Q56

Suggested Citation

van der Meijden, Gerard and Smulders, Jacobus (Sjak) A., Technological Change During the Energy Transition (August 18, 2014). Tinbergen Institute Discussion Paper 14-108/VIII. Available at SSRN: https://ssrn.com/abstract=2482397 or http://dx.doi.org/10.2139/ssrn.2482397

Gerard Van der Meijden (Contact Author)

Vrije Universiteit Amsterdam, School of Business and Economics ( email )

De Boelelaan 1105
Amsterdam, 1081HV
Netherlands

Jacobus (Sjak) A. Smulders

Tilburg University - Center and Faculty of Economics and Business Administration ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 466 2920 (Phone)
+31 13 466 3042 (Fax)

HOME PAGE: http://www.uvt.nl/webwijs/english/show.html?anr=801585&lang=en

University of Calgary - Department of Economics ( email )

2500 University Drive, NW
Calgary, Alberta T2N 1N4
Canada

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