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Energy Biased Technical Change: A CGE Analysis

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  • Löschel, Andreas
  • Otto, Vincent M.
  • Dellink, Rob B.

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 generalequilibrium 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.

Suggested Citation

  • Löschel, Andreas & Otto, Vincent M. & Dellink, Rob B., 2005. "Energy Biased Technical Change: A CGE Analysis," ZEW Discussion Papers 05-32, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:3278
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    References listed on IDEAS

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    More about this item

    Keywords

    computable general-equilibrium models; endogenous technical change; energy; environment;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models

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