Speaker Smulders - EnergyDays - 3 June 2014
- Geoffrey P. Hammond
- Bauke de Vries
- Martin de Jong
- Teun Bokhoven
University of Tilburg
Economic factors of the energy transition
From an economic perspective, the transition away from fossil fuels poses a major challenge. Our modern economy has been a “fossil-addict” for many decades and changing this might impair overall aggregate growth. On the other hand, depletion of fossil energy resources, oil in particular, could make the transition necessary independent of the climate change threat. We discuss this tension between energy use, carbon emissions, and economic growth.
From a policy perspective, the energy transition has to cope with two “externalities”: neither the damage from pollution and climate change nor the learning effects of innovation sufficiently affect decisions in the market. Hence, two types of policies are needed: emissions reductions and technology stimulation. Ideally these policies are applied at a global scale; unilateral policies are bound to produce perverse results. We discuss some of the problems associated to the choice of policies.
Sjak Smulders is Professor of Economic Growth and Technology at Tilburg Sustainability Centre, Tilburg University, and Adjunct Professor of Economics, Department of Economics, University of Calgary. His research is on resource economics, environmental policy, and economic growth.