Long-run Growth, Social Institutions and Living Standards

Long-run Growth, Social Institutions and Living Standards

Edited by Neri Salvadori and Arrigo Opocher

This engaging book contains a set of original contributions to the much-debated issues of long-run economic growth in relation to institutional and social progress.

Chapter 13: Sustainable Development and Energy Trends

Simone Borghesi and Alessandro Vercelli

Subjects: economics and finance, radical and feminist economics, social policy and sociology, economics of social policy

Extract

Simone Borghesi and Alessandro Vercelli 13.1. INTRODUCTION In this chapter, we will discuss to what extent the recent trends in energy consumption are compatible with the requirements of sustainable development. The current model of energy production, distribution and consumption is very vulnerable. This is because it is based almost exclusively on the use of fossil fuels (coal, natural gas and, above all, oil) whose reserves are strictly limited, although the experts are divided on the size of these limits. There is, however, unanimous agreement on the fact that the age of fossil fuels is bound to decline during this century, progressively giving way to renewable energy sources such as wind power, photovoltaic energy and, according to some experts, nuclear energy. Nevertheless, opinion is divided on what the characteristics of the new energy model should be, as regards the timing and the ways of making changes and therefore as regards also the best economic, environmental and energy policies to guide the pace for the transition process. Today’s energy model is vulnerable not only because fossil fuels are scarce, but also because their reserves are remarkably concentrated in terms of location and ownership.1 This exposes energy production and distribution to considerable geopolitical dangers which clearly emerged in the 1970s when the two oil shocks of 1973 and 1979 caused serious economic turmoil in the world economy due to the simultaneous increase of inflation and unemployment (stagflation). Furthermore, the geographical concentration of reserves has led to the consolidation of centralized and hierarchical energy...

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