From Primary Resources to Useful Energy: The Pollution Ceiling Efficiency Paradox

Jean-Pierre Amigues and Michel Moreaux

No 2016.10, Working Papers from FAERE - French Association of Environmental and Resource Economists

Abstract: We study an economy producing energy services from a polluting fossil fuel and a carbon free renewable resource under a constraint on the admissible atmospheric carbon concentration, equivalently under a constraint on the admissible temperature. The transformation rates of natural primary resources energy into useful energy are costly endogenous variables. Choosing higher efficiency rates requires to bring into operation more sophisticated ones, that is more costly ones. We show that, independently of technical progress, along a perfect foresight equilibrium path which is Pareto optimal, the transformation rate of any exploited resource should increase though out time, excepted within the period during which the carbon constraint is binding, what we call the 'ceiling paradox'.

Keywords: energy efficiency; carbon pollution; non-renewable resources; renewable resources (search for similar items in EconPapers)
JEL-codes: Q00 Q32 Q43 Q54 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2016-03
New Economics Papers: this item is included in nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:fae:wpaper:2016.10

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