Economic growth, energy use and the environment

The problem that motivates our project is the possible conflict between the policy goals of promoting economic growth while limiting energy consumption and environmental impact. Our study centers on the strength of this conflict and the extent to which technological progress may mitigate it.


Projektansvarig vid MDU

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In the light of the mentioned problem the project addresses the following questions:

  • What are the empirical relationships between economic growth, energy use and the state of the environment?
  • To what extent has technological progress made energy consumption more effective and reduced pollutant emissions per unit of output?
  • What future scenarios are probable?
  • Which policy instruments would promote the policy objectives?


Purpose of the project

The first purpose is to analyze the relationship between GDP, energy consumption and polluting emissions, by using two different empirical methods. The second purpose is to construct a dynamic model and simulate various possible future development paths for the Swedish economy and the environment. The third purpose is to use the empirical estimations to analyze and evaluate the effects of economic policy, such as taxes on energy and emissions and subsidies to research and development.


Goals of the project

It is expected that the project will contribute to (i) a better understanding on how the growing production can coexist with limited energy consumption and higher environmental goals, and (ii) to contribute with information, which is relevant for policy decisions to achieve the goals.



Acemoglu, D., P. Aghion, L. Bursztyn, och D. Hemous (2012), The environment and directed technical change, American Economic Review, 102(1): 131–166.

Hassler, J., P. Krusell och C. Olovsson (2012) Energy-Saving Technical Change, NBER Working Paper No. 18456.