the role of energy technologies in long run economic growth a historical perspective
Download
Skip this Video
Download Presentation
Roger Fouquet Grantham Research Institute on Climate Change and Environment

Loading in 2 Seconds...

play fullscreen
1 / 37

Roger Fouquet Grantham Research Institute on Climate Change and Environment - PowerPoint PPT Presentation


  • 110 Views
  • Uploaded on

The Role of Energy Technologies in Long Run Economic Growth: A Historical Perspective. Roger Fouquet Grantham Research Institute on Climate Change and Environment London School of Economics (LSE ) IAEE New York, 16 June 2014.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about ' Roger Fouquet Grantham Research Institute on Climate Change and Environment' - feng


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
the role of energy technologies in long run economic growth a historical perspective

The Role of Energy Technologies in Long Run Economic Growth: A Historical Perspective

Roger Fouquet

Grantham Research Institute on Climate Change and Environment

London School of Economics (LSE)

IAEE New York,

16 June 2014

energy services and economic development
Energy Services and Economic Development
  • Stern (2011) ANYAS
    • Changes in Energy Use-Economic Activity Linkage:

- Subs Energy and Other Inputs for Existing Tech.

- Technological Change; - Shifts in Composition of the Energy Input;

- Shifts in Composition of Economic Output.

  • Toman and Jemelkova (2003) EnJ
    • Different Channels of Effect of Energy Services
    • Effects Change with Economic Development
part 1

Part 1

The Importance of Demand

slide4

Lighting

Domestic Heating

Industrial Power

PassengerTransport

Lighting

0.1

Freight Transport

0.01

Source: Fouquet (2014) REEP

slide5

Income and Price Elasticity of Demand for Energy Services, 1800-2008

Lighting

Values Greater than One: 10% Increase in GDP pc leads to a more than 10% increase in Energy Service

Passenger Transport

Domestic Heating

Domestic Heating

Price Elasticities

Passenger Transport

Lighting

$(2010)28,500

$(2010)11,800

$(2010)6,400

$(2010)3,300

Source: Fouquet (2014) REEP

part 2

Part 2

The UK Energy-GDP Linkage

slide7

England and Great Britain GDP per capita, 1300-1900

Second Industrial Revolution

First Industrial Revolution

Take-Off of English Economic Development

Source: Broadberry et al (2013)

the importance of energy
The Importance of Energy
  • Cipolla, Wrigley, Allen: Role of Energy in Ind. Rev.
  • Major Technological Innovations in 1750-1913
    • New Energy Sources
    • Incorporate Role of Technologies
    • Major Improvements in Energy Efficiency
  • Producers Want Energy Services
    • Power for Mineral Extraction and Repetitive Tasks
    • Heating to Manufacture Metals
    • Freight Transport (Land and Sea)
slide9

Lighting

Consumption of Energy by Energy Services

in the United Kingdom (mtoe), 1700-2010

Freight Transport

Passenger Transport

Domestic Heating

Industrial Heating

Industrial Power

Source: Fouquet (2014) REEP

slide10

Energy Intensity in the United Kingdom, 1700-2010

Primary Energy Intensity

Final User Energy Intensity

Source: updated from Fouquet (2008)

slide11

Sectoral GDP in the United Kingdom, 1700-1870

Source: Broadberry et al (2013)

slide12

Energy Service Intensity per GDP in the United Kingdom, 1700-2000

Sea Freight Transport

Power

Land Freight Transport

Iron Production

Source: Updated from Fouquet (2008)

part 3

Part 3

The Impact of Energy Technologies

on Economic Growth

integrating energy services into energy intensive industries production function
Integrating Energy Services into Energy-Intensive Industries’ Production Function
  • Y = f1 (y1(K,L,E), y2(K,L,E), … )
  • For Energy Intensive Industries, e.g. UK 1750-1950

Energy Service (ES) combines K, L and E.

  • Y = f1 (y1(ES), y2(ES), … )
  • The Role of Costs of Production
  • Y = f1 (y1(C(ES)), y2(C(ES)), … )
  • Thus, when the cost of producing ES falls,

the costs of energy-intensive industrial production fall

slide15

Price of Energy Services in the United Kingdom, 1700-2010

Sea Freight Transport

Power

Iron Heating

Land Freight Transport

Source: Fouquet (2011) REEP, Broadberry et al (2013)

slide16

Price of Energy and Energy Services in the United Kingdom, 1700-2010

EnergyServices

Energy

Source: Fouquet (2011)

exogeneity of the price of energy services
Exogeneity of the ‘Price’ of Energy Services
  • Price of Energy Service:

Price of Energy

Efficiency of Energy Technology

  • Price of Energy may be affected by Economic Growth

if price elasticity of supply is low

  • Adoption of Energy Efficient Tech. is less affected
  • Combined (i.e. Price of ES) assumed to be exogenous
  • Thus, can identify the effect of Price of ES on GDP
granger causality tests
Granger Causality Tests
  • Effect of GDP per capita: Price of Land Freight pre-1850?
  • 1750-1800: Price of Power, Ind. Heat. & Land Transport on GDP per capita
  • 1800-1820: Little Effect
  • 1830-1850: Price of Sea Freight, and then Price of Land F.
  • 1860-1950: Price of Power, of Land Freight

(Modest Effect: Price of Sea Freight/Ind.Heat.)

slide19

Impact of 1% Decline in Energy Service Prices on GDP per capita, 1750-1950

Land Freight Transport

Power

Sea Freight Transport

Iron Heating

Source: Author’s Own Estimates

slide21

External Costs of Energy Use in the United Kingdom, 1800-2000

Lighting

Domestic Heating

Passenger Transport

Freight

Industrial Heating

Power

Source: Fouquet (2011) Ecological Economics

part 4

Part 4

Concluding Remarks

insights
Insights
      • Demand: Income Elasticities and Rebound Effects
      • Technological Impact on GDP per capita:
        • Kick-Starters and Drivers of Periods of Ec. Growth
        • Co-Evolution and Synergies between Technologies
        • Transformative Effect of Energy Technologies
  • Need to Understand How Cheap Energy Services

Intensifies Energy Service Use in the Economy

  • Energy-Intensive Industries Impacts on the Environment
slide25

Energy and Information Intensity in US, 1800-2010

Energy

Information: Newspapers and Internet

Communication

Energy

Source: Fouquet and Hippe (2014)

slide26

Pushing the Energy Frontier

or ‘Malthusian’ Energy Growth Trap?

Energy Service Consumption

Energy Limits

Supply-Side Shift

Energy Consumption

Energy Limits

Supply-Side Shift

Energy Limits

Technological Revolution

Technological Revolution

appendix

Appendix

Pre-1750

slide29

Energy Intensity in the United Kingdom, 1500-2010

Primary Energy Intensity

Final User Energy Intensity

Source: updated from Fouquet (2008)

slide30

Sectoral GDP in the United Kingdom, 1500-1750

Source: Broadberry et al (2013); Five-year average

slide32

Expenditure on Energy per GDP in the United Kingdom, 1500-2000

Power

The Decline in % Power Exp. in GDP is not due to a Decline in Power Expenditure, it is due to an Increase in GDP

Source: Fouquet (2008)

slide33

Energy Service Intensity per GDP in the United Kingdom, 1500-2000

Power

Iron Production

Freight Transport

Source: Fouquet (2008)

slide34

Price of Energy Services in the United Kingdom, 1700-2010

Sea Freight Transport

Power

Land Freight Transport

Iron Heating

Source: Fouquet (2011) REEP, Broadberry et al (2013)

slide35

Price of Energy Services in the United Kingdom, 1700-2010

GDP per capita

Sea Freight Transport

Power

Iron Heating

Land Freight Transport

Source: Fouquet (2011) REEP, Broadberry et al (2013)

slide36

Energy Intensity in European Countries, 1800-2000

Early Adopter: Exports and Inefficiencies

United Kingdom

Germany

France

Netherlands

Italy

Source: Kander et al. (2013)

slide37

Energy and Information Intensity in US, 1800-2010

Energy

Information: Newspapers and Internet

Communication

Energy

Source: Fouquet and Hippe (2014)

ad