Measuring Energy-saving Technological Change: International Trends and Differences

TL;DR

This paper analyzes international trends and differences in energy-saving technological change across OECD countries, sectors, and time, using panel data and production function estimation to inform sustainable growth policies.

Contribution

It provides a comprehensive measurement of sector-level energy-saving technological change across countries, highlighting variations and contributions to economic growth.

Findings

Energy-saving technology levels vary significantly across countries and sectors.

Growth rates of energy-saving technology differ over time and between sectors.

Factor-augmenting technologies contribute differently to economic growth across regions.

Abstract

Technological change is essential to balance economic growth and environmental sustainability. This study documents energy-saving technological change to understand the trends and differences therein in OECD countries. We estimate sector-level production functions with factor-augmenting technologies using cross-country and cross-industry panel data and shift-share instruments, thereby measuring energy-saving technological change for each country and sector. Our results show how the levels and growth rates of energy-saving technology vary across countries, sectors, and time. In addition, we evaluate the extent to which factor-augmenting technologies contribute to economic growth and how this contribution differs across countries and sectors.