Trends, Investment Behaviour and Policy Design
Edited by Raymond J.G.M. Florax, Henri L.F. de Groot and Peter Mulder
Chapter 1: Energy Efficiency and Technological Change
Raymond J.G.M. Florax, Henri L.F. de Groot and Peter Mulder 1 INTRODUCTION Energy consumption is essentially determined by the intimate relationship between technological and economic change. Within a relatively short period of time in the history of mankind, societies and economies have dramatically changed under the influence of economically generated technological innovations such as steam engines, railroads, internal combustion engines, electricity, airplanes, semi-conductors and satellites. This development not only implied spectacularly increasing levels of welfare, but also tremendously growing levels of energy consumption. As a result, modern societies became dependent on fossil fuels to meet their energy demand, with unfortunate consequences for energy security and the natural environment – the latter most notably in the form of an enhanced greenhouse effect that may cause considerable changes in the earth’s climate system. Somewhat paradoxically, technological change is a principal source for alleviating these problems as well, not in the least because technological change facilitates a decreasing ratio of energy consumption per unit of output. Technologies often emerge as ‘hopeful monstrosities’ (Mokyr, 1990). Cugnot’s steam truck built in 1769 had to stop every 15 minutes to have its boiler refilled, and the ENIAC computer from 1946 weighed 30 000 kg. Over time, technologies became more energy efficient under the influence of the marriage between economic and technical forces. The issue is clearly illustrated in Figure 1.1, which shows for the USA that although (total primary) energy consumption per capita has increased dramatically during the last century, the per capita gross domestic product (GDP)...
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