Working Paper: NBER ID: w18908
Authors: Juan Moreno Cruz; M. Scott Taylor
Abstract: We develop a spatial model of energy exploitation where energy sources are differentiated by their geographic location and energy density. The spatial setting creates a scaling law that magnifies the importance of differences across energy sources. As a result, renewable sources twice as dense, provide eight times the supply; and all new non-renewable resource plays must first boom and then bust. For both renewable and non-renewable energy sources we link the size of exploitation zones and energy supplies to energy density, and provide empirical measures of key model attributes using data on solar, wind, biomass, and fossil fuel energy sources. Non-renewable sources are four or five orders of magnitude more dense than renewables, implying that the most salient feature of the last 200 years of energy history is the dramatic rise in the use of energy dense fuels.
Keywords: energy economics; spatial model; energy density; renewable resources; nonrenewable resources
JEL Codes: Q0; Q4; R0; R12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Higher energy density (L94) | Larger areas of exploitation (J47) |
| Higher energy density (L94) | Greater energy supply (Q41) |
| Lower transportation costs (L91) | Reduced effective distance for energy extraction (Q49) |
| Access to denser energy sources (L94) | Exponentially greater energy supplies (Q47) |
| Doubling energy density (Q41) | Eightfold increase in energy supply (Q47) |