Modelling technological change and energy demand in economies in transition

Panel: Panel 5: Energy Policy for a Sustainable Environment

Authors:
Matthew A. Leach, Centre for Environmental Technology, Imperial College of Science, Technology and Medicine
Nigel J. D. Lucas, Centre for Environmental Technology, Imperial College of Science, Technology and Medicine

Abstract

The energy systems within Central and Eastern Europe are experiencing rapid change as countries move from centrally planned to market led economies. Patterns of energy use and supply will play key roles in determining the future level of air pollutant emissions. However, to date most studies have focused on alternatives for emission reduction in the energy supply sector only. Increased efficiency in energy use and fuel switches may offer opportunities for emission reduction at much lower cost, and it is essential that such options are compared objectively with those on the supply-side.

Under the prevailing conditions in Eastern Europe of rapid technological and structural change, conventional models based on econometric analysis or fuel price elasticities offer little insight into the process of reform. As such, it is difficult to assess the assumptions made and to gauge the accuracy of projections generated. An energy modelling approach based on the theories of technological innovation offers significant advantages for the investigation of the determinants of change.

A model is developed which takes explicit acc9unt of structural change whilst incorporating the major determinants of technological development. Policy intervention for emissions abatement through measures on the energy demand-side can be investigated through their effect on the uptake of efficient technologies and practices. There is great flexibility in the characterisation of energy end-use, facilitated by the use of an entity-relationship database design for the modelling package. The model is applied to analyse the changes in Hungary since the transition process began, and to investigate the likely path of future development.