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Energy price, energy efficiency, and capital productivity: Empirical investigations and policy implications

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  • Gamtessa, Samuel
  • Olani, Adugna Berhanu

Abstract

The immediate effect of carbon pricing policy is to raise energy costs, which in turn reduces energy consumption either through induced capital under-utilization or investments in new energy-efficient capital. The latter mechanism, which implies improvements in energy efficiency, is realized in the long-run while the former, which has implications for capital productivity, tends to occur in the short-run. We employ panel vector autoregressions as well as co-integration and error correction techniques to identify these short- and long-run relationships including their differences across Canadian industries.

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  • Gamtessa, Samuel & Olani, Adugna Berhanu, 2018. "Energy price, energy efficiency, and capital productivity: Empirical investigations and policy implications," Energy Economics, Elsevier, vol. 72(C), pages 650-666.
    • Handle: RePEc:eee:eneeco:v:72:y:2018:i:c:p:650-666
    DOI: 10.1016/j.eneco.2018.04.020
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    More about this item

    Keywords

    Energy intensities; Capital productivity; Energy price; Panel structural VAR; Panel error-correction;
    All these keywords.

    JEL classification:

    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity

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