Energy Biased Technical Change: A Cge Analysis

38 Pages Posted: 24 Jun 2005 Last revised: 18 Aug 2008

See all articles by Andreas Löschel

Andreas Löschel

University of Muenster - Chair of Microeconomics, esp. Energy and Resource Economics

Vincent M. Otto

affiliation not provided to SSRN

Rob Dellink

Wageningen UR - Environmental Economics and Natural Resources Group; Organization for Economic Co-Operation and Development (OECD)

Abstract

This paper studies energy bias in technical change. For this purpose, we develop a computable general equilibrium model that builds on endogenous growth models. The model explicitly captures links between energy, the rate and direction of technical change, and the economy. We derive the equilibrium determinants of biased technical change and show the importance of feedback in technical change, substitution possibilities between final goods, and general-equilibrium effects for the equilibrium bias. If the feedback effect is strong, or the substitution elasticity large, or both, our model tends to a corner solution in which only technologies are developed that are appropriate for production of non-energy intensive goods.

Keywords: computable general-equilibrium models, endogenous technical change, energy, environment

JEL Classification: O32, O33, O38, H23, D58

Suggested Citation

Löschel, Andreas and Otto, Vincent M. and Dellink, Rob and Dellink, Rob, Energy Biased Technical Change: A Cge Analysis. ZEW - Centre for European Economic Research Discussion Paper No. 05-032, FEEM Working Paper No. 90.05, Available at SSRN: https://ssrn.com/abstract=748746 or http://dx.doi.org/10.2139/ssrn.748746

Andreas Löschel (Contact Author)

University of Muenster - Chair of Microeconomics, esp. Energy and Resource Economics ( email )

Universitätsstr. 14-16
48143 Munster
Germany

HOME PAGE: http://www.wiwi.uni-muenster.de/eroe

Vincent M. Otto

affiliation not provided to SSRN

Rob Dellink

Wageningen UR - Environmental Economics and Natural Resources Group ( email )

P.O. Box 8130
Wageningen, 6700 EW
Netherlands
+31 (0)317 4 82009 (Phone)
+31 (0)317 4 84933 (Fax)

HOME PAGE: http://www.sls.wau.nl/enr/staff/dellink/

Organization for Economic Co-Operation and Development (OECD) ( email )

Paris
France

HOME PAGE: http://www.oecd.org/env/cc/econ

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