What is it about?
In this study, we examine how a feed-in tariff (FIT) accompanied with deregulation in the energy sector affects the direction of technical change along the balanced growth path. A final good is composed of resource-saving (such as renewable) energy and traditional resource-intensive energy. The government introduces a FIT scheme for promoting resource-saving energy, while it deregulates the traditional energy sector for efficiency improvement. The implementation of the scheme positively affects directed technical change toward the resource-saving energy technology and economic growth. Meanwhile, the biased technical change leads to an upsurge in the surcharge. Associated deregulation not only accelerates the biased technical change but also drives the surge in the surcharge rate, unless the initial market structure of the traditional energy sector is highly concentrated.
Featured Image
Why is it important?
FIT schemes promote resource-saving energy, while it deregulates the traditional energy sector for efficiency improvement. The implementation of the scheme positively affects directed technical change toward the resource-saving energy technology and economic growth. Meanwhile, the biased technical change leads to an upsurge in the surcharge.
Perspectives
stments may be necessary to prevent its adverse impact.Obviously, the model developed herein has several limitations. For exam-ple, we have not examined the transition to a balanced growth path (such asin Futagami et al. ,1993 [9]). Moreover, we have not analyzed the other typesof FIT policy design options as mentioned in Couture and Gagnon (2010). These aspects may offer scope for future research.
Prof. (Associate) Minoru Nakada
Graduate School of Environmental Studies, Nagoya University
Read the Original
This page is a summary of: Effect of Feed-In Tariff with Deregulation on Directed Technical Change in the Energy Sector, The B E Journal of Macroeconomics, November 2021, De Gruyter,
DOI: 10.1515/bejm-2021-0177.
You can read the full text:
Contributors
The following have contributed to this page
