Capital-Energy Substitution and Shifts in Factor Demand: A Meta-Analysis

Koetse, Mark J.; Groot, H.L.F. de; Florax, Raymond J.G.M.

doi:10.2139/ssrn.917113

Cited by 46 publications

(68 citation statements)

References 32 publications

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“…In line with the empirical evidence in Koetse, de Groot, and Florax (2008) regime shifts by using phase diagrams. Infinitely lived households own the resource stock and the firms and they derive utility from consumption.…”

Section: The Modelsupporting

confidence: 85%

Carbon Lock-In: The Role of Expectations

Meijden

Smulders

2014

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractWe argue that expectations about future energy use affect the transition from fossil fuels to renewable substitutes, because of an interaction between innovation and resource scarcity. The paper presents a model of directed technical change to study this interaction. We find that resource-saving technical change erodes the incentives to implement the substitute. Conversely, the anticipation of the substitute being implemented in the future diminishes the incentives to invest in resource-saving technology. As a result, two dynamic equilibria may arise, one with a transition to the substitute and with low resource efficiency, and one without the substitute and with fast efficiency improvements. Expectations determine which equilibrium arises in the decentralized market equilibrium. If multiple equilibria exist, the transition to the substitute generates higher welfare.JEL codes: O30, Q32, Q42, Q55

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Section: The Modelsupporting

confidence: 85%

Carbon Lock-In: The Role of Expectations

Meijden

Smulders

2014

SSRN Journal

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“…In recent years, energy substitution is considered as one of the most important ways to solve the problems of resource constraints and environmental pressures, and also achieve sustainable development [4][5][6][7]. Energy substitution can be specifically divided into inter-fuel substitution and inter-factor substitution.…”

Section: Figure1 the Primary Energy Consumption Of China And Us And mentioning

confidence: 99%

“…However, CPE can only and simply describe the absolute replacement between factors, for example, the change in capital when energy price changes. That is, CPE cannot explain the effect of changes in relative proportion of input factors on the changes in relative price; even if the increase in energy prices lead to a reduction in the demand for capital 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 Million tonnes oil equivalent In recent years, energy substitution is considered as one of the most important ways to solve the problems of resource constraints and environmental pressures, and also achieve sustainable development [4][5][6][7]. Energy substitution can be specifically divided into inter-fuel substitution and inter-factor substitution.…”

Section: Figure1 the Primary Energy Consumption Of China And Us And mentioning

confidence: 99%

Energy Substitution Effect on China’s Heavy Industry: Perspectives of a Translog Production Function and Ridge Regression

Lin

Kui

2017

Sustainability

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Abstract:A translog production function model with input factors including energy, capital, and labor is established for China's heavy industry. Using the ridge regression method, the output elasticity of each input factor and the substitution elasticity between input factors are analyzed. The empirical results show that the output elasticity of energy, capital and labor are all positive, while the output elasticities of energy and capital are relatively higher, indicating that China's heavy industry is energy-and capital-intensive. Simultaneously, all the input factors are substitutes, with the substitution between labor and energy having the highest degree of responsiveness. The substitution elasticity between labor and energy is decreasing, while the substitution elasticities of capital for energy and labor are increasing. More capital input can help to improve energy efficiency and thus accomplish the goal of energy conservation in China's heavy industry.

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“…Later work discussed the choice of the appropriate partial substitution elasticities (Taylor andThompson 1995, Frondel 2010), the dependency of results on data and econometric design (Koetse, De Groot, and Florax 2008) and the parametrization and interpretation of translog estimates (Frondel and Schmidt 2006). Closer to the structures employed in applied theory are empirical studies based on nested CES functions (Kemfert 1998, Van der Werf 2008.…”

Section: Empiricsmentioning

confidence: 99%

Elasticity of Substitution between Clean and Dirty Energy Inputs - A Macroeconomic Perspective

2013

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. Abstract Recently Acemolgu, Aghion, Bursztyn and Hemous (AER 2012) formulated a model in which a high macroeconomic elasticity of substitution between clean and dirty production represents a crucial condition for green growth. Until now it has never been systematically estimated. Using a novel panel of cross-country sectoral data, we formulate specifications of nested CES production functions that allow to estimate a special case of this parameter: the elasticity of substitution between clean and dirty energy inputs. Contrary to what is expected based on the earlier interfuel substitution literature, we find evidence that this elasticity exceeds one.JEL Classification: O44; O47; Q54; Q58.

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Capital-Energy Substitution and Shifts in Factor Demand: A Meta-Analysis

Cited by 46 publications

References 32 publications

Carbon Lock-In: The Role of Expectations

Carbon Lock-In: The Role of Expectations

Energy Substitution Effect on China’s Heavy Industry: Perspectives of a Translog Production Function and Ridge Regression

Elasticity of Substitution between Clean and Dirty Energy Inputs - A Macroeconomic Perspective

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