An overview of salient factors, relationships and values to support integrated energy-economic systems dynamic modelling
Stellenbosch Working Paper Series No. WP02/2013Publication date: 2013
Author(s):
[protected email address] (Engineering Department, Calvin College)
[protected email address] (Independent Researcher)
Integrated energy-economic modeling is needed to support the development of energy and carbon policies. We propose that a systems dynamic modeling approach is needed; one that includes (a) dynamics (b) endogenous treatment of uncertainty and risks, and (c) both aggregate economic and disaggregate technical or engineering levels of analysis. To support the future development of integrated energy-economic models we review and organise the literature on energy-economy interactions into subsections covering (a) the key factors or components, (b) the relationships among these components, (c) a quantification of parameters and (d) implications for the development of an integrated energy-economic systems dynamic model. The literature is organized in discussions on economic growth and the factors of production, elasticities, macro- and technical substitutability, energy cost shares, heat engine efficiencies and energy services efficiencies. We observe non-linear relationships in production and consumption, large variations among price and income elasticity values across time frames, across countries and regions, and across energy goods, far from perfect substitution among factors of production and among energy goods on a macro level, technical/engineering limits to substitution on a micro level, as well as engineering and behavioural limits on what can be achieved with increased efficiencies. We therefore support the call to develop integrated energy-economic systems dynamic models that are able to provide new insight into the nature of energy-economic transitions
JEL Classification:C63, Q43, Q47
Keywords:energy-economic modeling, system dynamics, elasticities, economic substitution, technical substitution, energy efficiency, energy cost share, heat engine efficiency
Download: PDF (257 KB)Login
(for staff & registered students)
Upcoming Seminars
Monday 28 July 202512:00-13:00
Dr Neil Rankin: Ceo Of Predictive Insights & Stellenbosch University
Topic: "TBC"
12:00-13:00
Prof Willem Boshoff: Stellenbosch University
Topic: "Two competing approaches in South African competition policy: merger control and anti-cartel enforcement over the past 30 years"
12:00-13:00
Professor Johan Fourie: Stellenbosch University
Topic: "Economic History: TBC"
BER Weekly
25 Jul 2025 Budget hurdle cleared, but US tariff implementation remains a riskIt was another big week on the local political front, but with some constructive momentum. On the trade front, ahead of next week’s 1 August deadline, Trump announced another “massive” trade deal with Japan. The upcoming week is busy, with a slew of global and domestic data releases and several monetary policy decisions, including the SARB....
Read the full issue
Upcoming Seminars
Monday 28 July 202512:00-13:00
Dr Neil Rankin: Ceo Of Predictive Insights & Stellenbosch University
Topic: "TBC"
12:00-13:00
Prof Willem Boshoff: Stellenbosch University
Topic: "Two competing approaches in South African competition policy: merger control and anti-cartel enforcement over the past 30 years"
12:00-13:00
Professor Johan Fourie: Stellenbosch University
Topic: "Economic History: TBC"
BER Weekly
25 Jul 2025 Budget hurdle cleared, but US tariff implementation remains a riskIt was another big week on the local political front, but with some constructive momentum. On the trade front, ahead of next week’s 1 August deadline, Trump announced another “massive” trade deal with Japan. The upcoming week is busy, with a slew of global and domestic data releases and several monetary policy decisions, including the SARB....
Read the full issue