Assessing Energy Price Induced Improvements in Efficiency of Capital in OECD Manufacturing Industries
To assess how capital stocks adapt to energy price changes, it is necessary to account for the impacts on different vintages of capital and to account separately for price-induced and autonomous improvements in the energy efficiency of capital stoc...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2014/06/19696243/assessing-energy-price-induced-improvements-efficiency-capital-oecd-manufacturing-industries http://hdl.handle.net/10986/18809 |
| Summary: | To assess how capital stocks adapt to
energy price changes, it is necessary to account for the
impacts on different vintages of capital and to account
separately for price-induced and autonomous improvements in
the energy efficiency of capital stock. The results of
econometric analysis for five manufacturing industries in 19
OECD countries between 1990 and 2005 indicate that higher
energy prices resulted in smaller energy use due to both
improved energy efficiency of capital stock and reduced
demand for the energy input. The investment response to
energy prices varied considerably across manufacturing
industries, being more significant in energy-intensive
sectors. The results of policy simulations indicate that a
carbon tax can deliver significant reductions in energy
consumption in the medium run with modest declines in
energy-using capital stock. |
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