Proposal preview

Energy efficiency, economic growth and environment

Energy efficiency is a key concern for both industry and policy-makers. In the last decades, it has been considered the main offsetting factor of rising global energy consumption and CO2 emissions. But its importance has let itself been felt since the beginning of industrialization. Increased energy consumption has led simultaneously to technological breakthroughs, which have improved the efficiency of energy use. Although the effects of energy efficiency have been remarkable throughout modern history, there are surprisingly very few studies made on the different historical paths of energy efficiency taken by different countries. This session aims to tackle the topic of energy efficiency in economic history and its importance to both long-run economic growth and the environment.
One goal of this session is to bring together new long-run data and methodological discussions on how to measure energy efficiency of countries or industries. How should we measure technological progress? Economic measures of efficiency, such as primary energy per value added have been criticized by some for not capturing adequately how productively energy is used within the economy. Are engineering measures of efficiency, such as useful energy (Ayres and Warr, 2009) or energy services(Fouquet, 2010) more appropriate to apply in historical contexts?
Another goal for this session is to explore the relationship between energy productivity and economic growth. The importance of energy for economic growth has been stressed in the economic history literature (e.g. Allen 2009; Kander et al. 2013; Wrigley 1988). However, while national differences in labor productivity in various manufacturing sectors have been the focus of many comparative productivity studies (Broadberry, 1997), energy productivity has been relatively neglected. Likewise, growth literature rooted in neoclassical growth models, such as the Solow model, does not include resources or energy as a factor of production, and long-run growth economists (e.g. Galor 2011) do not consider energy at all.
Studies on how energy relates to other factors of production such as labor and capital and attempts to incorporate energy as an explanatory factor of economic development will also be welcomed themes in this session.
This session will also discuss how increases in energy efficiency can become detrimental to the environment. The idea that increases in energy efficiency will tend to increase, rather than decrease energy consumption was first hypothesized by Jevons (1865) in his book the Coal Question. He observed that the increased efficiency of the steam engine had led to savings of coal in particular industrial processes but had at the same time the rebound effect of increased the demand for coal in a variety of new industries that was superior to the initial savings. His argument rested on the intuition that economic savings from increasing energy efficiency would be spent increasing the demand for new energy services. The history of energy transitions and technological innovations is full of examples of this rebound effect. The papers in this session will address energy transitions and energy crises in different contexts, with regards to divergences or convergences between technological and ecological conditions and the role of innovation as a means of redress. Interdisciplinary approaches will be welcome.

Deadline of the Call: Applications must be submitted to the corresponding organizer (sofiathenriques@gmail.com) no later than 10 February 2018. The application consists of an abstract of circa 300 words and a 1 page CV including affiliation and relevant publications. Applicants will be notified of the outcome of their submission before February 20.

Organizer(s)

  • Mathieu Arnoux Université Paris-Diderot mathieu.arnoux@univ-paris-diderot.fr
  • Sofia Henriques Lund University sofiathenriques@gmail.com

Session members

  • Mar Rubio, Universidade Publica de Navarra
  • Beatriz Munoz, Universidade Autonoma de Madrid
  • Roger Fouquet, London School of Economics
  • Victor Court, CERES, Ecole Normal Superior
  • Francesca Sanna, Paris Diderot
  • Cristian Ducoing, Lund University
  • Javier Silvestre, University of Saragoza
  • Sarah Claire, EHESS
  • Michael Matheis, Saint Anselm College
  • Sofie Mittas, Johannes Kepler University, Linz

Discussant(s)

  • Mar Rubio Universidade Publica de Navarra mar.rubio@unavarra.es

Papers

Panel abstract

Energy efficiency is a key concern for both industry and policy-makers. In the last decades, it has been considered the main offsetting factor of rising global energy consumption and CO2 emissions. But its importance has let itself been felt since the beginning of industrialization. Increased energy consumption has led simultaneously to technological breakthroughs, which have improved the efficiency of energy use. Although the effects of energy efficiency have been remarkable throughout modern history, there are surprisingly very few studies made on the different historical paths of energy efficiency taken by different countries. This session aims to tackle the topic of energy efficiency in economic history and its importance to both long-run economic growth and the environment.

1st half

Management Management of the Vltava hydrosystem in the medieval and modern Kingdom of Bohemia

Sarah Claire

The Vltava River was a major economic road of the medieval and modern Kingdom of Bohemia. It started in the south of Bohemia, where boats were filled with carps and salt, and floating timber gathered. The river headed north, ran through the fertile cereal plains of central Bohemia, and unloaded its goods in the urban markets of Prague, a city of 40,000 inhabitants in the 15th century. Hydraulic industries with an energetic use of the resource, along the numerous activities that used the river, led to the transformation of the fluvial landscape, to satisfy the needs of population and industries. One of the main actor of these transformations was the Crown directed a development policy of the Vltava, so that Prague become the economic and commercial heart of Europe. It sought to optimize the sharing of river space, for example with the construction of locks or the creation of the...

The Vltava River was a major economic road of the medieval and modern Kingdom of Bohemia. It started in the south of Bohemia, where boats were filled with carps and salt, and floating timber gathered. The river headed north, ran through the fertile cereal plains of central Bohemia, and unloaded its goods in the urban markets of Prague, a city of 40,000 inhabitants in the 15th century. Hydraulic industries with an energetic use of the resource, along the numerous activities that used the river, led to the transformation of the fluvial landscape, to satisfy the needs of population and industries. One of the main actor of these transformations was the Crown directed a development policy of the Vltava, so that Prague become the economic and commercial heart of Europe. It sought to optimize the sharing of river space, for example with the construction of locks or the creation of the court of law of the Sworn Millers to rule on disputes over the exploitation of water. We will see that the first intention was to establish a balance between the energy hydraulic industries (for grinding, metallurgy, textile, paper mill, etc.), and the floating timber and navigation, which were essential for the supply of Prague and silver mining centers. The aim here is to qualify the optimization of the energy hydraulic devices, among other economic activites using the hydraulic resource, whether these aparaterus were legal, technical or social. We will underline the ecological consequences, such as the increase of the water line and the flood risk, but also the transformation of economic systems, following what it seems to be a growing efficiency of the circulation of goods by waterway in the Kingdom.

Integration in the European Coal Markets 1850 1913

John Murray, Javier Silvestre

This paper analyzes coal market integration in Europe over the long nineteenth century. The market integration of coal, a key commodity, is an aspect of the European economic history that has received little attention. We examine intra- and international market integration in the principal coal producing countries. We provide descriptive evidence and use a straightforward empirical approach to address coal price behavior. We observe clear trends toward integration in domestic markets. The international market tended towards disintegration as of the end on the century. We offer some explanations about the extent and timing of integrations and suggest their implications

This paper analyzes coal market integration in Europe over the long nineteenth century. The market integration of coal, a key commodity, is an aspect of the European economic history that has received little attention. We examine intra- and international market integration in the principal coal producing countries. We provide descriptive evidence and use a straightforward empirical approach to address coal price behavior. We observe clear trends toward integration in domestic markets. The international market tended towards disintegration as of the end on the century. We offer some explanations about the extent and timing of integrations and suggest their implications

Production, prices and technology: a historical analysis of the US coal industry

Mike Matheis

This paper expands upon the current literature regarding non-renewable resource extraction and production by using county level data in the U.S., spanning over 70 years, to analyze how fluctuations in production, prices, and technology impacted the coal mining industry at the county level in the United States. What drove coal production at the county level in the U.S.? How did the coal mining industry change throughout the twentieth century? Were coal producers aware of, and responsive at the local level to, the behavior of past and future coal prices? To answer these questions I collected, compiled, and digitized a long run panel database of county level coal mining production, value, and employment from 1900 to 1976 spanning the entire U.S. This paper provides a narrative and graphical description of how coal production changed in the U.S. throughout the twentieth century. This paper also provides evidence that coal producers responded in...

This paper expands upon the current literature regarding non-renewable resource extraction and production by using county level data in the U.S., spanning over 70 years, to analyze how fluctuations in production, prices, and technology impacted the coal mining industry at the county level in the United States. What drove coal production at the county level in the U.S.? How did the coal mining industry change throughout the twentieth century? Were coal producers aware of, and responsive at the local level to, the behavior of past and future coal prices? To answer these questions I collected, compiled, and digitized a long run panel database of county level coal mining production, value, and employment from 1900 to 1976 spanning the entire U.S. This paper provides a narrative and graphical description of how coal production changed in the U.S. throughout the twentieth century. This paper also provides evidence that coal producers responded in a signicant way to variation in national and local coal prices, and that coal producers were aware, and responded at the local level, to the behavior of past coal prices.

Machinery and horsepower prices. 1850 - 1913

Cristian Ducoing

The debate on industrial revolution (IR) has been focused on the incentives behind investment decisions and how the preliminary conditions to allow this phenomenon was situated in England. One of the most famous and original theories to explain IR is the developed by (Allen, 2012, 2009b,a), who taking into account a vast literature on organic fuels and the transition to fossil fuels (WRIGLEY, 1962; Wrigley, 2013), argues that the reason why IR was British is the unique combination of expensive labour and cheap energy. This combination produces the incentives to invest in labour saving machinery. Several works have proved the existence of cheap fossil fuels during the XIX century, determined by the introduction of coal. Figures and indicators on wages and energy are broadly accepted, however, machinery price indexes are at least discussed and the elaboration of the most used index is based almost completely in the iron price (Feinstein...

The debate on industrial revolution (IR) has been focused on the incentives behind investment decisions and how the preliminary conditions to allow this phenomenon was situated in England. One of the most famous and original theories to explain IR is the developed by (Allen, 2012, 2009b,a), who taking into account a vast literature on organic fuels and the transition to fossil fuels (WRIGLEY, 1962; Wrigley, 2013), argues that the reason why IR was British is the unique combination of expensive labour and cheap energy. This combination produces the incentives to invest in labour saving machinery. Several works have proved the existence of cheap fossil fuels during the XIX century, determined by the introduction of coal. Figures and indicators on wages and energy are broadly accepted, however, machinery price indexes are at least discussed and the elaboration of the most used index is based almost completely in the iron price (Feinstein (1972, 1988). To prove the Allen hypothesis, we require a better index on machinery, measuring horsepower prices, relative costs and international changes in their trade. Using a novel data on merchants’ catalogues, several international trade statistics plus all the price indexes available, in this article is presented an improved machinery price index for UK in the period 1850 - 1913; given the influence of British Machinery & Equipment in the world market until 1913, this price index could be useful to understand relative costs transformation in several regions.

Managing human energy : consultancy and its application in european mining industry during the interwar period.

Francesca Sanna

The Interwar period is considered the cradle of the european market for consultancy. It has been largely showed that the two tendencies are linked : industrialists had to recover from the war damages and then from crisis, so they found in consultancy an appropriate way to succeed. Beginning from the tayloristic idea of modelling every aspect of human labour, consultants began to integrate a reflection on human energy and how to obtain the best perfomance in terms of efficiency. The idea was to manage the « exploitment chain » of human energy to improve the productivity of the whole productive process. The result was sometimes the development of methods that focused specifically on the measurement and management of human energy at work. To this extent, it seems quite interesting to investigate this « efficiency craze » in the mining industry with a case study approach that could take into account...

The Interwar period is considered the cradle of the european market for consultancy. It has been largely showed that the two tendencies are linked : industrialists had to recover from the war damages and then from crisis, so they found in consultancy an appropriate way to succeed. Beginning from the tayloristic idea of modelling every aspect of human labour, consultants began to integrate a reflection on human energy and how to obtain the best perfomance in terms of efficiency. The idea was to manage the « exploitment chain » of human energy to improve the productivity of the whole productive process. The result was sometimes the development of methods that focused specifically on the measurement and management of human energy at work. To this extent, it seems quite interesting to investigate this « efficiency craze » in the mining industry with a case study approach that could take into account different areas.

2nd half

The Austrian Pulp and Paper Industries Energy Use in the Context of the European Recovery Program, 1945-1955

Sofie Mittas

Immediately after the Second World War, the pulp and paper industries had to deal with extreme shortages in coal and raw material supplies. Archive material shows that the industrial corporation as well as single company owners were creative in their efforts to overcome these challenges. Energy efficiency depended on the utilization of capacities in a time when supply chains were interrupted and supplies were short. They were able to recover to pre-war production levels even before the industry entered the ERP. Afterwards, it could modernize its factory equipment and rationalize production processes. The investment program was influenced by the experts of the ECA (Economic Cooperation Administration) that was in charge of granting ERP loans to the applying companies. The investments increased the energy efficiency on many levels. This included technologies that allowed reusing energy within the production process, reducing waste as well as using waste products from other industries. It...

Immediately after the Second World War, the pulp and paper industries had to deal with extreme shortages in coal and raw material supplies. Archive material shows that the industrial corporation as well as single company owners were creative in their efforts to overcome these challenges. Energy efficiency depended on the utilization of capacities in a time when supply chains were interrupted and supplies were short. They were able to recover to pre-war production levels even before the industry entered the ERP. Afterwards, it could modernize its factory equipment and rationalize production processes. The investment program was influenced by the experts of the ECA (Economic Cooperation Administration) that was in charge of granting ERP loans to the applying companies. The investments increased the energy efficiency on many levels. This included technologies that allowed reusing energy within the production process, reducing waste as well as using waste products from other industries. It also increased the rapidly growing pulp and paper industries’ own energy production capacities and enabled it to cover a growing amount of energy demand by itself.

200 years diversifying the energy mix? Diversification paths of the energy baskets of European early comers vs. latecomers

Beatriz Muñoz-Delgado, Mar Rubio-Varas

The changes in the composition of the energy basket in the long run lead to energy transitions. Primary energy substitution models allow addressing these phenomena. However, the diversification paths of the energy mix of different countries in a long term compared perspective have not been studied in a synthetic form yet. This paper proposes an indicator, based on the Herfindahl-Hirschman Index, the Energy Mix Concentration Index (EMCI), to quantify the degree of diversification of the primary energy basket of eight European countries over the last two centuries. The results reveal that early comers, which are large energy consumers, required a huge concentration of their energy basket in the 19th century. From the second half of the 20th century, all the observed countries had converged to similar levels of diversification of their energy mixes, and more crucially after the oil crises, but while the early comers did it from above, the...

The changes in the composition of the energy basket in the long run lead to energy transitions. Primary energy substitution models allow addressing these phenomena. However, the diversification paths of the energy mix of different countries in a long term compared perspective have not been studied in a synthetic form yet. This paper proposes an indicator, based on the Herfindahl-Hirschman Index, the Energy Mix Concentration Index (EMCI), to quantify the degree of diversification of the primary energy basket of eight European countries over the last two centuries. The results reveal that early comers, which are large energy consumers, required a huge concentration of their energy basket in the 19th century. From the second half of the 20th century, all the observed countries had converged to similar levels of diversification of their energy mixes, and more crucially after the oil crises, but while the early comers did it from above, the latecomers (small energy consumers) converged from below, that is becoming less diversified than in the past. Our results suggest that small energy consuming countries are able to achieve higher diversification in their energy mixes, and therefore may be able do a faster transition to a low carbon economy, than large energy consumers.

Energy, knowledge, and demo-economic development in the long run: a unified growth model

Victor Court, Emmanuel Bouvari

This article provides a knowledge-based and energy-centered unified growth model of the economic transition from limited to sustained growth. We model the transition between: (i) a pre-modern organic regime defined by limited growth in per capita output, high fertility, low levels of human capital, technological progress generated by learning-by-doing, and rare GPT arrivals; and (ii) a modern fossil regime characterized by sustained growth of per capita output, low fertility, high levels of human capital, technological progress generated by profit-motivated R&D, and increasingly frequent GPT arrivals. The associated energy transition results from the endogenous shortage of renewable resources availability, and the arrival of new GPTs which redirect technological progress towards the exploitation of previously unprofitable exhaustible energy. Calibrations of the model are currently in progress: (i) to replicate the historical experience of England from 1560 to 2010; and (ii) to compare the different trajectories of Western Europe and Eastern Asia.

This article provides a knowledge-based and energy-centered unified growth model of the economic transition from limited to sustained growth. We model the transition between: (i) a pre-modern organic regime defined by limited growth in per capita output, high fertility, low levels of human capital, technological progress generated by learning-by-doing, and rare GPT arrivals; and (ii) a modern fossil regime characterized by sustained growth of per capita output, low fertility, high levels of human capital, technological progress generated by profit-motivated R&D, and increasingly frequent GPT arrivals. The associated energy transition results from the endogenous shortage of renewable resources availability, and the arrival of new GPTs which redirect technological progress towards the exploitation of previously unprofitable exhaustible energy. Calibrations of the model are currently in progress: (i) to replicate the historical experience of England from 1560 to 2010; and (ii) to compare the different trajectories of Western Europe and Eastern Asia.

A Historical Cost Benefit Analysis of Technological Revolutions

Roger Fouquet

This paper compares the consumer surplus from different technologies with the external costs they generated over the last three hundred years. The evidence indicates that the total consumer benefits are generally substantially greater than the total externalised costs – particularly associated with railways and cars, gas and electric lighting, and most forms of communication. However, in a few instances, such as urban fires caused by candle lighting and air pollution due to coal burning, the damage caused exceeds the consumer benefits. In addition to the total costs and benefits, the paper examines the marginal benefits and costs of technologies, indicating that the consumption of these technologies was greater than the optimal level, suggesting market failures associated with technological development in the past.

This paper compares the consumer surplus from different technologies with the external costs they generated over the last three hundred years. The evidence indicates that the total consumer benefits are generally substantially greater than the total externalised costs – particularly associated with railways and cars, gas and electric lighting, and most forms of communication. However, in a few instances, such as urban fires caused by candle lighting and air pollution due to coal burning, the damage caused exceeds the consumer benefits. In addition to the total costs and benefits, the paper examines the marginal benefits and costs of technologies, indicating that the consumption of these technologies was greater than the optimal level, suggesting market failures associated with technological development in the past.