Download The macroeconomic impacts of reducing energy use

The macroeconomic impacts
of reducing energy use
What lies beyond orthodox growth models?
Lukas Bunse, University of Leeds
International Exergy Economics Workshop, 14/07/2016
www.see.leeds.ac.uk/people/l.bunse
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Outline
• Background of my PhD
• Results of my literature review
• Ideas and questions to take
forward
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Background
• In 30 years we will use less
energy than now
• How to get there without making
a mess of it?
• Two stories: decoupling vs.
economic decline
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Literature review question
• Why do different researchers
reach so different conclusions on
the possibility of decoupling
energy use from economic
growth?
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My answer …
• Orthodox growth theory
• … and the distinction between the
short-term and the long-term
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Example of peak oil
Orthodox paradigm
Oil shock
GDP
Equilibrium Growth
Trend
=
Production function +
factor inputs +
technical progress
Time
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Example of peak oil
Alternative Paradigm
High oil prices
Higher oil
demand
Recession
Economic
growth
Lower oil
demand
Dynamic
limits to
growth
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Low oil prices
Adapted from Murphy & Hall 2011
Tug of war model
(orthodox)
Economic
growth
Energy
Transmission belt
model
(alternative)
Economic
growth
Energy
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https://commons.wikimedia.org/wiki/Tug_of_war#/medi
a/File:Tug_of_war_pictogram.svg
Problems with orthodox
theory
• Possibility of decoupling often
built in by assumption
• Growth trend is often exogenous
• Abstracts from complex dynamics
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Moving forward
• How to conduct research under
alternative, non-equilibrium
paradigm ?
• How to go beyond aggregate
production functions?
• What are alternative paradigms?
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Looking for inspiration …
• Heterodox schools of economic
thought
• Post-Keynesian economics
• Evolutionary economics
• Ecological Macroeconomics
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Specific questions?
1) Case studies of decoupling. Are
they sustainable?
2) How do effects of energy price
shocks vary over different time
scales?
3) What is the relationship between
energy and labour productivity
growth?
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Thanks for listening!
Questions or ideas?
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Reference(s)
Murphy, D. J., & Hall, C. A. S. (2011). Energy return on
investment, peak oil, and the end of economic growth. Annals
of the New York Academy of Sciences, 1219, 52–72
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