1,720,977 research outputs found
Bending the learning curve
Full text linkThis paper aims at improving the application of the learning curve, a popular tool used for forecasting future costs of renewable technologies in integrated assessment models (IAMs). First, we formally discuss under what assumptions the traditional (OLS) estimates of the learning curve can deliver meaningful predictions in IAMs. We argue that the most problematic of them is the absence of any effect of technology cost on its demand (reverse causality). Next, we show that this assumption can be relaxed by modifying the traditional econometric method used to estimate the learning curve. The new estimation approach presented in this paper is robust to the reverse causality problem but preserves the reduced form character of the learning curve. Finally, we provide new estimates of learning curves for wind turbines and PV technologies which are tailored for use in IAMs. Our results suggest that the learning rate should be revised downward for wind power, but possibly upward for solar PV
Induced technological change and energy efficiency improvements
No full textWe present a theoretical and empirical model which (1) shows that the demand for energy is shifted down by innovations in energy intensive sectors and (2) highlights the drivers of innovative activity in these sectors. The theoretical model and the empirical analysis of patent and energy data indicate that the level of innovative activity is determined by energy expenditure as well as international and inter-temporal spillovers. The solution of the theoretical model along the balanced growth path suggests that in general equilibrium the level of innovative activity depends on the growth rate of energy generation cost. The model predicts also that a level increase in the cost of energy does not alter the long-run energy share of income. Finally, we show that our results can be used to calibrate Integrated Assessment Models to project energy efficiency growth
Report on Economic Quantitative Ex-Ante Assessment of Proposed Policy Mixes in the EU
No full textThe purpose of deliverable D6.2 is to support with a quantitative economic assessment the evaluation of a set of policies scrutinized within the DYNAMIX project, aiming to promote decoupling of resources use from GDP and material efficiency within the EU. The analytical tools used for the investigation are three macro - economic models, ICES, MEMO and MEWA, all belonging to the category of Computable General Equilibrium modelling, but with complementary characteristics. More specifically: they all provide a sectoral representation of the EU economic system and endogenous price formation. In practice, they can assess direct and indirect policy effects on the whole economic system and the full macroeconomic feedbacks, beyond the sector initially subjected to the policy intervention. However, ICES representing the EU with a country detail, is better suited to capture intra and extra EU trade effects. MEWA and MEMO consi der the EU as a single region, but differently from ICES, offer a more realistic representation of technological change, feature forward looking agents and have a richer representation of labour supply choices. The policies examined by the different models and their slightly different implementation, due to the differences in the models’ sectoral and functional details, are summarized in the table below. [Table 1 DYNAMIX Quantitative Economic Assessment Policy Matrix.]
The first two policies examined - a material tax and a tax aimed at internalising environmental externalities - are based on different designs and implementation strategies. Nonetheless, their common trait is the breadth. They have direct and indirect effects on many sectors, and thus have impacts clearly detectable on the overall EU GDP.
The strongest message from the analysis is that the cost of the policy crucially depends upon (a) the sensitivity of the production system to the dynamic incentive to dematerialize induced by the policy signal, i.e. ultimately upon the reaction (or availability) of technological progress and (b) the use of tax revenues, i.e. on the implementation of an appropriate revenue - recycling scheme.
A combination of technological progress in response to the tax with a reduction in labour taxation can indeed, according to the modelled outcomes, end up stimulating economic growth (a maximum 8% GDP gain in 2050) and increasing material efficiency (in a range between 12 to more than 70% in 2050), reaping a material “double dividend”: more GDP and lower material use. Without these two factors, however, especially when taxes are rebated lump - sum to households, the policy can be particularly depressing for EU GDP ( - 5% ), and, as a further drawback, might even worsen, rather than increase material efficiency in many material intensive sectors of the economy. This can happen when the reduction in economic activity outpaces the decline in material use at the sectoral level.
All in all, the tax shift fosters a huge transformation of the production system. Therefore, notwithstanding final net GDP gains, material intensive sectors would be highly penalized (a good example is the iron and steel sector which may experience a production decline up to 60% when exposed to a material tax). This calls for a careful designing and planning of the policies devising a set of accompanying measures to smooth the most adverse social effects. Increasing public investment for R&D dedicated to material efficiency, whether financed through increases in labour, corporate or value added taxation, seems to have the highest potential to boost GDP among the three policies and is also the least burdensome for material intensive sectors. In fact, final material use can also increase, as an economic “rebound effect” materializes with the “production scale” effect being larger than the “material use decline” effect. This raises a caveat: although supporting material efficiency R&D might seem the “optimal” policy to foster absolute decoupling, it should be accompanied by further regulation or incentives limiting material use or promoting dematerialized services.
Despite the obvious differences, the tax to foster pesticide reduction, the increase in the VAT on meat and a targeted information campaign to influence food behaviour towards less meat intensive diets, address a group of sectors with a “low weight” in term of EU value added. Thus, their relevance is prominently sectoral. Raising the VAT on meat to the EU average VAT level can be successful in reducing meat consumption (between 2.5 and 14% in 2050). Meat industry exports are expected to increase in response to the decrease in world meat prices following the contraction of EU demand while effects on ‘Non - meat’ based food production in the EU is ambiguous but anyway moderate ( 0.7%, - 0.24% in 2050 depending on the model). Potential declines in ‘Non - meat’ based food production might occur when the demand contraction induced by the tax on household budget meets higher input costs as some meat products are used as intermediates also by the non - meat food industry. Again, final GDP impacts are determined by the use of VAT revenues. If they are rebated in a lump sum to households, GDP in the EU could decline by 0.05%; if labour taxes are reduced, GDP could increase by 0.35%. Comparable effects on meat industry production (a contraction by 6% in the ICES model) and slight GDP gains (by 0.04% in the EU in 2050) would be induced by the information campaign to shift food consumption habits. Notably, the effect on GD P is positive, rather than negative as in the VAT case, even without an accompanying reduction in labour taxes. This occurs as the recomposition of consumers’ preferences is not induced by any active tax policy which ultimately impacts household income, but just by the “persuasion” of consumers. In this sense, inducing “just” a substitution and not an income effect, the action of the campaign is less invasive. However, it has to be recognized that there is a huge uncertainty on the effectiveness of information campaigns and on the time they would need to accomplish the desired results. These issues are not considered in the current analysis though.
The pesticide tax, finally, can reduce the use of pesticides (up to 10% in the models) while exerting a limited effect on the EU agricultural activity (which in 2050 contracts of the 0.08% - 0.8%) and an even smaller one on overall EU GDP. When changes are so small, however, it is possible that indirect effects prevail over direct effects. For instance, in some simulations, an increase, albeit small, in EU chemical sector production is observed. This is explained by the increase in agricultural production outside the EU favored by the higher prices of EU agricultural commodities, which brings about an increased demand for fertilizers and pesticides, including those produced in the EU, which are exported more. The policy thus would not induce a decrease in the negative externality, but its de-location abroad. These unintended secondary effects should thus be dealt with specific corrections. Like the material tax policy, the circular tax design aims to foster dematerialization, recycle and re-use, but with a much narrower scope as it focusses specifically on raw materials (excluding metals) extraction. In the light of the relatively limited economic relevance of the mining sector in the EU, policy effects are mostly felt by raw-material-intensive branches of the production system, while systemic effects are small. Not surprisingly, mining of non-ferrous minerals (experiencing a production contraction in the range of 7 - 35%) and the non-metallic minerals transformation sector (contracting 7 - 10% by mid-century) are the more heavily affected. Once again, revenue recycling mechanisms play some role. Nonetheless, the small volume of revenues available to be recycled does not allow for significant GDP and employment expansion. Similarly, the absence of recycling does not cause huge GDP impacts, although they remain slightly negative (-0.32% in 2050). The overall dematerialization potential of the policy, especially in the long term, is limited if compared to that for instance of the material tax, producing at best a 3% material efficiency improvement with respect to the reference scenario. The last policy examined, is the shift towards more “leisure consumption”. Its direct consequence is the decrease in the labour supply. Therefore, the price of labour (wages) will increase, leading to some substitution of labour with capital, energy and materials. In the short run, this will increase the capital - to - GDP ratio, energy - intensity and material intensity. However, in the long run, as the economy will produce less goods to be consumed, an absolute reduction in the use of energy and materials will occur along with the decline in GDP. Exports will also be penalized with potential negative consequences on the current account
Analiza transformacji energetycznej w Polsce i Danii ze szczególnym uwzględnieniem wyobrażeń społeczno-technicznych
No full textStudium wykonalności Europejskiego Zielonego Ładu w oparciu o cele w zakresie redukcji emisji gazów cieplarnianych, określone w rozporządzeniu dotyczącym wspólnego wysiłku redukcyjnego
No full text
Technology and the economy : the two-way causality
Full text linkDefence date: 27 February 2015Examining Board: Professor Árpád Ábrahám, EUI, Supervisor; Professor Miklós Koren, Central European University; Professor Ramon Marimon, EUI; Professor José Vicente Rodríguez Mora, University of Edinburgh.The thesis explores the role of technology in some of the most important economic phenomena of the last decades and examines how changes in the state of the economy could influence the nature of technology. In the first chapter I study the relation between supply of skilled labor, firms’ choice of optimal technology and wage inequality. Researchers have acknowledged that one of the key causes of the increase in inequality across OECD countries was the introduction of skill-biased production methods, which generated a higher demand for skilled workers. In the chapter, I explore whether the shift to skill-biased production method was a consequence of changing nature of new global technological paradigm (specifically, the arrival of the information technology) or a consequence of firms’ choice to exploit the new technological paradigm in a way that favors skilled workers. Such choice could be motivated by a rapid increase in availability of college graduates in 70s and 80s. To study these questions, I first observe that while the source of the latter cause is global, the source of the former rests in labor market conditions at the country level. Hence panel data estimators could be used to disentangle the two effects. I find that endogenous technology choice at the local level can explain 30% of the increase of the college premium in the OECD countries. The second chapter studies how the rate and direction of technological change is influenced by the parameters of consumers’ preferences. I demonstrate that the elasticity of substitution between goods in the Dixit-Stiglitz framework can be represented as a simple linear function of a taste heterogeneity measure. I combine this result with Young’s model of endogenous growth, which predicts that the speed of technological progress depends positively on the elasticity of substitution between goods. The purpose of the third chapter is to summarize the convergence of Central and Eastern European to Western European economies in the period between 1995 and 2007. It decomposes growth of relative output into growth of capital, labor input, human capital and TFP. I find the evidence for the massive contribution of TFP convergence in the GDP convergence
Optimal Diversity in Auctions for Renewable Energy Sources under Technological Uncertainty
No full textPublikacja bezkosztow
Workers or Consumers: Who Pays for Low-Carbon Transition – Theoretical Analysis of Welfare Change in General Equilibrium Setting
No full textPolicies that are introduced to mitigate adverse consequences of climate change involve economic costs. For some households, these costs will materialise in the form of an increase in prices of consumption goods, whereas for others they will materialise in the form of falling productivity and wages. Disentangling these two effects is important in the light of the design of funds that aim to support the households that are negatively affected by climate policy. In this article, we study the effect of carbon tax on welfare through changes of consumer prices and wages in a general equilibrium setting. In the first step, we review the literature on ‘top-down’ models, which are used to evaluate the macroeconomic cost of climate policy. We find that these models usually do not account for loss of productivity of workers who must change their sector due to climate policy. In the second step, we develop a theoretical, micro-founded, two-sector model that explicitly accounts for the loss of productivity of workers. The compensation of climate-change mitigation costs would require allocation of separate funds for the affected consumers and workers
- …
