Sakai, Marco orcid.org/0000-0002-9337-5148, Brockway, Paul E., Barrett, John R. et al. (1 more author) (2019) Thermodynamic Efficiency Gains and their Role as a Key ‘Engine of Economic Growth’. Energies. 110. ISSN 1996-1073
Abstract
Increasing energy efficiency is commonly viewed as providing a key stimulus to economic growth, through investment in efficient technologies, reducing energy use and costs, enabling productivity gains, and generating jobs. However, this view is received wisdom, as empirical validation has remained elusive. A central problem is that current energy-economy models are not thermodynamically consistent, since they do not include the transformation of energy in physical terms from primary to end-use stages. In response, we develop the UK MAcroeconometric Resource COnsumption (MARCO-UK) model, the first econometric economy-wide model to explicitly include thermodynamic efficiency and end energy use (energy services). We find gains in thermodynamic efficiency are a key ‘engine of economic growth’, contributing 25% of the increases to gross domestic product (GDP) in the UK over the period of 1971–2013. This confirms an underrecognised role for energy in enabling economic growth. We attribute most of the thermodynamic efficiency gains to endogenised technical change. We also provide new insights into how the ‘efficiency-led growth engine’ mechanism works in the whole economy. Our results imply a slowdown in thermodynamic efficiency gains will constrain economic growth, whilst future energy-GDP decoupling will be harder to achieve than we suppose. This confirms the imperative for economic models to become thermodynamically consistent.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2018 by the authors. |
Keywords: | energy efficiency,economic growth,thermodynamics,energy-economy modelling,energy demand,exergy,Energy efficiency |
Dates: |
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Institution: | The University of York |
Academic Units: | The University of York > Faculty of Sciences (York) > Environment and Geography (York) |
Depositing User: | Pure (York) |
Date Deposited: | 09 Jan 2019 13:00 |
Last Modified: | 06 Dec 2024 00:15 |
Published Version: | https://doi.org/10.3390/en12010110 |
Status: | Published |
Refereed: | Yes |
Identification Number: | 10.3390/en12010110 |
Related URLs: | |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:140837 |