lundi 30 mars 2015

Transition to renewable energy: not quick but better if people are frightened

Prudence Dato,, IREGE/University of Savoie (France)

The latest climate change news includes both new engagements and enforcement of existing engagements. For instance, the new US commitment aims at reducing their emissions up to 40% (from 2008 to 2025), and increasing up to 30% the share of electricity from clean energy sources. Also, the European Union (EU) leaders agreed to develop innovative strategies for a new generation of renewable energies and increase energy efficiency through the European Energy Union, while China found it more interesting to enforce existing pollution regulation than taking new engagements.[1] However, the full energy transition maybe hindered by some constraints such as the availability of inputs (mostly rare materials) and the need of fossil fuels to produce solar panels or wind turbine as a self-reproducing photovoltaic cells or wind turbine is not possible.

Dato (2015)[2] considers the issue of energy transition in a theoretical growth model that involves both the decision of renewable energy adoption and that of investment in energy saving technologies. The results suggest that the sole adoption of the renewable energy is optimal only in the long run. This result is in line with the asymptotic energy transition argument that states that the transition to "clean" energy only happens in the long run. It may be a consequence of the impossibility of self-reproducing renewable energy. As the economy still needs fossil fuels to produce clean energy, it is efficient to progressively replace fossil fuels with a clean source of energy. Then, a quick and full energy transition is not optimal for the economy, and one should not expect any immediate transition to an economy that only uses renewable sources of energy. Dato (2015) suggests that economic instruments such as taxes on the "dirty" energy or subsidies on the "clean" energy should be designed to meet the requirements of a transition to a sole use of "clean" energy in the long run.

The results of the study also show that the economy that fears pollution is more favorable to the energy transition. This suggests that people must be more sensitized about the potential consequences of their use of fossil fuels. Clearly the “Under the Dome” video[3] does the job for China. What for Europe? For several hours on Wednesday last week, Paris was declared the most polluted city in the world. Scary isn’t it? Well, mainly due to exceptionally good weather conditions in Shanghai…and although car driving is banned on alternate days in Paris, there is still a lack of explanation and of sensitization.

[1] See previous post in this blog (

[2] P Dato (2015). Energy transition under irreversibility: a two-sector approach. FAERE Working Paper, 2015.05.

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