A Spatial Approach to Energy Economics

61 Pages Posted: 22 Mar 2013 Last revised: 2 Mar 2023

See all articles by Juan Bernardo Moreno Cruz

Juan Bernardo Moreno Cruz

Georgia Institute of Technology

M. Scott Taylor

University of Calgary - Department of Economics

Date Written: March 2013

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.

Suggested Citation

Moreno Cruz, Juan Bernardo and Taylor, Michael Scott, A Spatial Approach to Energy Economics (March 2013). NBER Working Paper No. w18908, Available at SSRN: https://ssrn.com/abstract=2237821

Juan Bernardo Moreno Cruz (Contact Author)

Georgia Institute of Technology ( email )

Michael Scott Taylor

University of Calgary - Department of Economics ( email )

2500 University Drive, NW
Calgary, Alberta T2N 1N4
Canada

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