Energy economics
Encyclopedia
Energy economics is a broad scientific
subject area which includes topics related to supply
and use of energy
in societies
. Due to diversity of issues and methods applied and shared with a number of academic discipline
s, energy economics does not present itself as a self contained academic discipline, but it is an applied subdiscipline of economics
. From the list of main topics of economics, some relate strongly to energy economics:
Energy economics also draws heavily on results of energy engineering
, geology
, political sciences, ecology
etc. Recent focus of energy economics includes the following issues:
Some institutions of higher education (universities) recognise energy economics as a viable career opportunity, offering this as a curriculum
. The University of Cambridge
, Massachusetts Institute of Technology
and the Vrije Universiteit Amsterdam
are the top three research universities, and Resources for the Future
the top research institute. There are numerous other research departments, companies and professionals offering energy economics studies and consultations.
, but have their roots much further back in the history. As early as 1865, W.S. Jevons
expressed his concern about the eventual depletion of coal resources in his book The Coal Question. One of the best known early attempts to work on the economics of exhaustible resources (incl. fossil fuel) was made by H. Hotelling
, who derived a price path for non-renewable resources
, known as Hotelling's rule
.
There are several other journals that regularly publish papers in energy economics:
There is also a handbook in three volumes.
Much progress in energy economics has been made through the conferences of the International Association for Energy Economics, the model comparison exercises of the (Stanford) Energy Modeling Forum
and the meetings of the International Energy Workshop.
IDEAS/RePEc
has a list of energy economists, a ranking of the same, and a collection of recent working papers.
Science
Science is a systematic enterprise that builds and organizes knowledge in the form of testable explanations and predictions about the universe...
subject area which includes topics related to supply
Energy supply
Energy supply is the delivery of fuels or transformed fuels to point of consumption. It potentially encompasses the extraction, transmission, generation, distribution and storage of fuels...
and use of energy
Energy
In physics, energy is an indirectly observed quantity. It is often understood as the ability a physical system has to do work on other physical systems...
in societies
Society
A society, or a human society, is a group of people related to each other through persistent relations, or a large social grouping sharing the same geographical or virtual territory, subject to the same political authority and dominant cultural expectations...
. Due to diversity of issues and methods applied and shared with a number of academic discipline
Academic discipline
An academic discipline, or field of study, is a branch of knowledge that is taught and researched at the college or university level. Disciplines are defined , and recognized by the academic journals in which research is published, and the learned societies and academic departments or faculties to...
s, energy economics does not present itself as a self contained academic discipline, but it is an applied subdiscipline of economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
. From the list of main topics of economics, some relate strongly to energy economics:
- EconometricsEconometricsEconometrics has been defined as "the application of mathematics and statistical methods to economic data" and described as the branch of economics "that aims to give empirical content to economic relations." More precisely, it is "the quantitative analysis of actual economic phenomena based on...
- Environmental economicsEnvironmental economicsEnvironmental economics is a subfield of economics concerned with environmental issues. Quoting from the National Bureau of Economic Research Environmental Economics program:...
- FinanceFinance"Finance" is often defined simply as the management of money or “funds” management Modern finance, however, is a family of business activity that includes the origination, marketing, and management of cash and money surrogates through a variety of capital accounts, instruments, and markets created...
- Industrial organizationIndustrial organizationIndustrial organization is the field of economics that builds on the theory of the firm in examining the structure of, and boundaries between, firms and markets....
- MicroeconomicsMicroeconomicsMicroeconomics is a branch of economics that studies the behavior of how the individual modern household and firms make decisions to allocate limited resources. Typically, it applies to markets where goods or services are being bought and sold...
- MacroeconomicsMacroeconomicsMacroeconomics is a branch of economics dealing with the performance, structure, behavior, and decision-making of the whole economy. This includes a national, regional, or global economy...
- Resource economics
Energy economics also draws heavily on results of energy engineering
Engineering
Engineering is the discipline, art, skill and profession of acquiring and applying scientific, mathematical, economic, social, and practical knowledge, in order to design and build structures, machines, devices, systems, materials and processes that safely realize improvements to the lives of...
, geology
Geology
Geology is the science comprising the study of solid Earth, the rocks of which it is composed, and the processes by which it evolves. Geology gives insight into the history of the Earth, as it provides the primary evidence for plate tectonics, the evolutionary history of life, and past climates...
, political sciences, ecology
Ecology
Ecology is the scientific study of the relations that living organisms have with respect to each other and their natural environment. Variables of interest to ecologists include the composition, distribution, amount , number, and changing states of organisms within and among ecosystems...
etc. Recent focus of energy economics includes the following issues:
- Climate changeClimate changeClimate change is a significant and lasting change in the statistical distribution of weather patterns over periods ranging from decades to millions of years. It may be a change in average weather conditions or the distribution of events around that average...
and climate policy - Risk analysisRisk analysis (Business)Risk analysis is a technique to identify and assess factors that may jeopardize the success of a project or achieving a goal.This technique also helps to define preventive measures to reduce the probability of these factors from occurring and identify countermeasures to successfully deal with these...
and security of supply - SustainabilitySustainabilitySustainability is the capacity to endure. For humans, sustainability is the long-term maintenance of well being, which has environmental, economic, and social dimensions, and encompasses the concept of union, an interdependent relationship and mutual responsible position with all living and non...
- Energy marketEnergy marketEnergy markets are those commodities markets that deal specifically with the trade and supply of energy. Energy market may refer to an electricity market, but can also refer to other sources of energy...
s and electricity marketElectricity marketIn economic terms, electricity is a commodity capable of being bought, sold and traded. An electricity market is a system for effecting purchases, through bids to buy; sales, through offers to sell; and short-term trades, generally in the form of financial or obligation swaps. Bids and offers use...
s - liberalisation, (de- or re-) regulationRegulationRegulation is administrative legislation that constitutes or constrains rights and allocates responsibilities. It can be distinguished from primary legislation on the one hand and judge-made law on the other... - Demand responseDemand responseIn electricity grids, demand response is similar to dynamic demand mechanisms to manage customer consumption of electricity in response to supply conditions, for example, having electricity customers reduce their consumption at critical times or in response to market prices...
- Energy and economic growthEconomic growthIn economics, economic growth is defined as the increasing capacity of the economy to satisfy the wants of goods and services of the members of society. Economic growth is enabled by increases in productivity, which lowers the inputs for a given amount of output. Lowered costs increase demand...
- Economics of energy infrastructure
- Environmental policyEnvironmental policyEnvironmental policy is any [course of] action deliberately taken [or not taken] to manage human activities with a view to prevent, reduce, or mitigate harmful effects on nature and natural resources, and ensuring that man-made changes to the environment do not have harmful effects on...
- Energy policyEnergy policyEnergy policy is the manner in which a given entity has decided to address issues of energy development including energy production, distribution and consumption...
- Energy derivativeEnergy derivativeMajor players in energy derivatives include major trading houses, oil companies, utilities, financial institutions.-Definition:An energy derivative is a derivative contract based on an underlying energy asset, such as natural gas, crude oil, or electricity...
s - Forecasting energy demandWorld energy resources and consumption]World energy consumption in 2010: over 5% growthEnergy markets have combined crisis recovery and strong industry dynamism. Energy consumption in the G20 soared by more than 5% in 2010, after the slight decrease of 2009. This strong increase is the result of two converging trends...
- ElasticityElasticity (economics)In economics, elasticity is the measurement of how changing one economic variable affects others. For example:* "If I lower the price of my product, how much more will I sell?"* "If I raise the price, how much less will I sell?"...
of supply and demand in energy marketEnergy marketEnergy markets are those commodities markets that deal specifically with the trade and supply of energy. Energy market may refer to an electricity market, but can also refer to other sources of energy... - Energy elasticityEnergy elasticityEnergy elasticity is a term used with reference to the energy intensity of Gross Domestic Product. It is "the percentage change in energy consumption to achieve one per cent change in national GDP"....
Some institutions of higher education (universities) recognise energy economics as a viable career opportunity, offering this as a curriculum
Curriculum
See also Syllabus.In formal education, a curriculum is the set of courses, and their content, offered at a school or university. As an idea, curriculum stems from the Latin word for race course, referring to the course of deeds and experiences through which children grow to become mature adults...
. The University of Cambridge
University of Cambridge
The University of Cambridge is a public research university located in Cambridge, United Kingdom. It is the second-oldest university in both the United Kingdom and the English-speaking world , and the seventh-oldest globally...
, Massachusetts Institute of Technology
Massachusetts Institute of Technology
The Massachusetts Institute of Technology is a private research university located in Cambridge, Massachusetts. MIT has five schools and one college, containing a total of 32 academic departments, with a strong emphasis on scientific and technological education and research.Founded in 1861 in...
and the Vrije Universiteit Amsterdam
Vrije Universiteit
The Vrije Universiteit is a university in Amsterdam, Netherlands. The Dutch name is often abbreviated as VU and in English the university uses the name "VU University". The university is located on a compact urban campus in the southern part of Amsterdam in the Buitenveldert district...
are the top three research universities, and Resources for the Future
Resources for the Future
Resources for the Future is a nonprofit organization that conducts independent research into environmental, energy, and natural resource issues, primarily via economics and other social sciences. Headquartered in Washington, D.C., RFF performs research around the world...
the top research institute. There are numerous other research departments, companies and professionals offering energy economics studies and consultations.
History
Energy related issues have been actively present in economic literature since the 1973 oil crisis1973 oil crisis
The 1973 oil crisis started in October 1973, when the members of Organization of Arab Petroleum Exporting Countries or the OAPEC proclaimed an oil embargo. This was "in response to the U.S. decision to re-supply the Israeli military" during the Yom Kippur war. It lasted until March 1974. With the...
, but have their roots much further back in the history. As early as 1865, W.S. Jevons
William Stanley Jevons
William Stanley Jevons was a British economist and logician.Irving Fisher described his book The Theory of Political Economy as beginning the mathematical method in economics. It made the case that economics as a science concerned with quantities is necessarily mathematical...
expressed his concern about the eventual depletion of coal resources in his book The Coal Question. One of the best known early attempts to work on the economics of exhaustible resources (incl. fossil fuel) was made by H. Hotelling
Harold Hotelling
Harold Hotelling was a mathematical statistician and an influential economic theorist.He was Associate Professor of Mathematics at Stanford University from 1927 until 1931, a member of the faculty of Columbia University from 1931 until 1946, and a Professor of Mathematical Statistics at the...
, who derived a price path for non-renewable resources
Non-renewable resources
A non-renewable resource is a natural resource which cannot be produced, grown, generated, or used on a scale which can sustain its consumption rate, once depleted there is no more available for future needs. Also considered non-renewable are resources that are consumed much faster than nature...
, known as Hotelling's rule
Hotelling's rule
Hotelling's rule states that the most socially and economically profitable extraction path of a non-renewable resource is one along which the price of the resource, determined by the marginal net revenue from the sale of the resource, increases at the rate of interest...
.
See also
- Ecological economicsEcological economicsImage:Sustainable development.svg|right|The three pillars of sustainability. Clickable.|275px|thumbpoly 138 194 148 219 164 240 182 257 219 277 263 291 261 311 264 331 272 351 283 366 300 383 316 394 287 408 261 417 224 424 182 426 154 423 119 415 87 403 58 385 40 368 24 347 17 328 13 309 16 286 26...
- Embodied energyEmbodied energyEmbodied energy is defined as the sum of energy inputs that was used in the work to make any product, from the point of extraction and refining materials, bringing it to market, and disposal / re-purposing of it...
- EnergeticsEnergeticsEnergetics is the study of energy under transformation. Because energy flows at all scales, from the quantum level to the biosphere and cosmos, energetics is a very broad discipline, encompassing for example thermodynamics, chemistry, biological energetics, biochemistry and ecological energetics...
- Energy accountingEnergy accountingEnergy accounting is a system used within industry, where measuring and analyzing the energy consumption of different activities is done to improve energy efficiency.-Energy management:...
- Energy & EnvironmentEnergy and EnvironmentEnergy & Environment is a peer-reviewed academic journal aimed at natural scientists, technologists, and the international social science and policy communities covering the direct and indirect environmental impacts of energy acquisition, transport, production and use. Its editor-in-chief since...
- Energy balanceEnergy balanceEnergy balance may refer to:* First law of thermodynamics, according to which energy cannot be created or destroyed, only modified in form* Energy balance , a measurement of the biological homeostasis of energy in living systems...
- Energy policyEnergy policyEnergy policy is the manner in which a given entity has decided to address issues of energy development including energy production, distribution and consumption...
- Energy qualityEnergy qualityEnergy quality is the contrast between different forms of energy, the different trophic levels in ecological systems and the propensity of energy to convert from one form to another. The concept refers to the empirical experience of the characteristics, or qualia, of different energy forms as they...
- EROEIEROEIIn physics, energy economics and ecological energetics, energy returned on energy invested ; or energy return on investment , is the ratio of the amount of usable energy acquired from a particular energy resource to the amount of energy expended to obtain that energy resource...
- Industrial ecologyIndustrial ecologyIndustrial Ecology is the study of material and energy flows through industrial systems. The global industrial economy can be modeled as a network of industrial processes that extract resources from the Earth and transform those resources into commodities which can be bought and sold to meet the...
- International Energy AgencyInternational Energy AgencyThe International Energy Agency is a Paris-based autonomous intergovernmental organization established in the framework of the Organisation for Economic Co-operation and Development in 1974 in the wake of the 1973 oil crisis...
- List of energy topics
- SustainabilitySustainabilitySustainability is the capacity to endure. For humans, sustainability is the long-term maintenance of well being, which has environmental, economic, and social dimensions, and encompasses the concept of union, an interdependent relationship and mutual responsible position with all living and non...
- ThermoeconomicsThermoeconomicsThermoeconomics, also referred to as biophysical economics, is a school of heterodox economics that applies the laws of thermodynamics to economic theory. The term "thermoeconomics" was coined in 1962 by American engineer Myron Tribus, and developed by the statistician and economist Nicholas...
Sources, links and portals
Leading journals of energy economics include:- Energy EconomicsEnergy Economics (journal)Energy Economics is a scientific journal published by Elsevier under its "North Holland" imprint. The journal publishes research papers concerned with the economic and econometric modelling and analysis of energy systems and issues...
- Energy Journal
- Resource and Energy Economics
There are several other journals that regularly publish papers in energy economics:
- Energy -- The International Journal
- Energy Policy
- International Journal of Global Energy Issues
- Utilities Policy
There is also a handbook in three volumes.
Much progress in energy economics has been made through the conferences of the International Association for Energy Economics, the model comparison exercises of the (Stanford) Energy Modeling Forum
Energy Modeling Forum
The Energy Modeling Forum is a structured forum for discussing important issues in energy and the environment. The EMF was established in 1976 at Stanford University. The EMF works through a series of ad hoc working groups, each focussing on a particular corporate or policy decision...
and the meetings of the International Energy Workshop.
IDEAS/RePEc
Řepeč
Řepeč is a village and municipality in Tábor District in the South Bohemian Region of the Czech Republic.The municipality covers an area of , and has a population of 267 ....
has a list of energy economists, a ranking of the same, and a collection of recent working papers.