Comparative assessment of energy-economy interactions

This analysis is concerned with the impact of energy-policy measures on the level, growth, and structure of the US economy. In particular, the nature and magnitude of the causal relationship between variations in the prices of various energy forms and economic performance, as measured by real gross national product (GNP), is studied. The combined Brookhaven National Laboratory/Dale W. Jorgenson Associates (BNL/DHA) energy-economy model system is used to determine the economic effects of three energy-price futures combined with an invariant set of energy policies. The price alternatives are intended to characterize the uncertainty that exists in the policy-planning environment. In addition, the results are compared to those obtained from another DOE-sponsored analysis which used the Data Resources, Incorporated (DRI) quarterly macroeconomic model to assess the effects of these same three cases. Significant numerical differences in the results from these modeling systems are observed and are attributed to structural differences between the two methodologies. The methodological issues emerging from this comparison have important policy implications which are independent of the specific numerical conclusions. Since it is uncertain which, if either, of the models is correct, the use of one for policy analysis entails the risk that policy will be predicated on inaccurate information. This risk is analyzed within an explicit framework and clear decision rules for information selection and the choice between the modeling systems are formulated

Strategic cost-benefit analysis of energy policies: detailed projections

Current US energy policy includes many programs directed toward restructuring the energy system in order to decrease US dependence on foreign supplies and to increase our reliance on plentiful and environmentally benign energy forms. However, recent events have led to renewed concern over the direction of current energy policy. This study describes three possible energy strategies and analyzes each in terms of its economic, environmental, and national security benefits and costs. Each strategy is represented by a specific policy. In the first, no additional programs or policies are initiated beyond those currently in effect or announced. The second is directed toward reducing the growth in energy demand, i.e., energy conservation. The third promotes increased domestic supply through accelerated development of synthetic and unconventional fuels. The analysis focuses on the evaluation and comparison of these strategy alternatives with respect to their energy, economic, and environmental consequences. Results indicate that conservation can substantially reduce import dependence and slow the growth of energy demand, with only a small macroeconomic cost and with substantial environmental benefits; the synfuels policy reduces imports by a smaller amount, does not reduce the growth in energy demand, involves substantial environmental costs and slows the rate of economic growth. These relationships could be different if the energy savings per unit cost for conservation are less than anticipated, or if the costs of synthetic fuels can be significantly lowered. Given these uncertainties, both conservation and RD and D support for synfuels should be included in future energy policy. However, between these policy alternatives, conservation appears to be the preferred strategy. The results of this study are presented in three reports (see also BNL--51105 and BNL--51128). 11 references, 3 figures, 61 tables

Strategic cost-benefit analysis of energy policies: comparative analysis

Current US energy policy includes many programs directed toward restructuring the energy system in order to decrease US dependence on foreign supplies and to increase our reliance on plentiful and environmentally benign energy flow. This study describes three possible energy strategies and analyzes each in terms of its economic, environmental, and national security benefits and costs. Each strategy is represented by a specific policy. In the first strategy no additional programs or policies are initiated beyond those currently in effect or announced. The second is directed toward reducing the growth in energy demand, i.e., energy conservation. The third promotes increased domestic supply through accelerated development of synthetic and unconventional fuels. The analysis focuses on the evaluation and comparison of these strategy alternatives with respect to their energy, economic, and environmental consequences. The results indicate that conservation can substantially reduce import dependence and slow the growth of energy demand, with only a small macroeconomic cost and with substantial environmental benefits; the synfuels policy reduces imports by a smaller amount, does not reduce the growth in energy demand, involves substantial environmental costs, and slows the rate of economic growth. These relationships could be different if the energy savings per unit cost for conservation are less than anticipated, or if the costs of synthetic fuels can be significantly lowered. Given these uncertainties, both conservation and RD and D support for synfuels should be included in future energy policy. However, between these policy alternatives, conservation appears to be the preferred strategy. The results of this study are presented in three reports: The Overview; The Detailed Projections; and The Comparative Analysis

Strategic cost-benefit analysis of energy policies: overview

This study describes three possible energy strategies and analyzes each in terms of its economic, environmental, and national security benefits and costs. Each strategy is represented by a specific policy. In the first, no additional programs or policies are initiated beyond those currently in effect or announced. The second is directed toward reducing the growth in energy demand, i.e., energy conservation. The third promotes increased domestic supply through accelerated development of synthetic and unconventional fuels. The analysis focuses on the evaluation and comparison of these strategy alternatives with respect to their energy, economic, and environmental consequences. The results indicate that conservation can substantially reduce import dependence and slow the growth of energy demand, with only a small macroeconomic cost and with substantial environmental benefits; the synfuels policy reduces imports by a smaller amount, does not reduce the growth in energy demand, involves substantial environmental costs and slows the rate of economic growth. These relationships could be different if the energy savings per unit cost for conservation are less than anticipated, or if the costs of synthetic fuels can be significantly lowered. Given these uncertainties, both conservation and RD and D support for synfuels should be included in future energy policy. However, between these policy alternatives, conservation appears to be the preferred strategy. The results of this study are presented in three reports (see also BNL--51127 and BNL--51128)