The relationship of energy growth to economic growth under alternative energy policies

This report is the first of a series of studies that will analyze the economic and social impacts of research, development, and demonstration plans of the Energy Research and Development Administration. Two policy proposals were examined against a Base Case set of economic and energy projections for the years 1985, 1990, and 2000: (1) the introduction of RD and D-initiated energy supply and end-use conversion technologies to expand domestic energy supply and to improve the efficiency and flexibility of its use; and (2) the imposition of taxes and tariffs on petroleum and natural gas to reduce demand for these primary energy sources. Targets for the amounts of imports of oil and gas were specified by ERDA as follows: 10 percent (or less) of total U.S. energy consumption in 1985; 8 percent (or less) of total U.S. energy consumption in 1990; and 5 percent (or less) of total U.S. energy consumption in 2000. The purpose of the analysis was to first identify the degree to which the introduction of new energy technologies and/or the imposition of energy taxes could reduce oil and gas imports toward the target levels; and second, to estimate the effects of these policies on the economy andmore » the environment. These economic and environmental effects are thus a measure of the costs associated with meeting the import targets. The benefits of these policies, in the form of increased economic and political security were not measured. The analysis was based on an analytic framework which linked detailed mathematical process engineering and economic models to more aggregate econometric models. The four models employed are described.« less