Localized Innovation, Localized Diffusion and the Environment: An Analysis of CO2 Emission Reductions by Passenger Cars, 2000-2007

We investigate technological change with regard to CO2 emissions by passenger cars, using a Free Disposal Hull methodology to estimate technological frontiers. We have a sample of cars available in the UK market in the period 2000 – 2007. Our results show that the rates of technological change (frontier movement) and diffusion (distance to frontier at the car brand level) differ substantial between segments of the car market. We conclude that successful policies should be aimed at diffusion of best-practice technology, and take account of the different potential for further progress between different segments of the market (e.g., diesel and gasoline engines, and small vs. large engines).CO2 emissions by cars, technological change, diffusion of innovations

Localized Innovation, Localized Diffusion and the Environment: An Analysis of CO2 Emission Reductions by Passenger Cars, 2000-2007

We investigate technological change with regard to CO2 emissions by passenger cars, using a Free Disposal Hull methodology to estimate technological frontiers. We have a sample of cars available in the UK market in the period 2000 – 2007. Our results show that the rates of technological change (frontier movement) and diffusion (distance to frontier at the car brand level) differ substantial between segments of the car market. We conclude that successful policies should be aimed at diffusion of best-practice technology, and take account of the different potential for further progress between different segments of the market (e.g., diesel and gasoline engines, and small vs. large engines).

Identification of Strategic Industries: A Dynamic Perspective

Every once in a while, national governments face difficult decision problems regarding financial support of important domestic firms or even entire national national industries. Similar problems are often faced by regional or urban governments. Given these problems, it is important to get indications of the societal value of industries. In principle, input-output tables provide a lot of information in revealing the linkages between industries. On the basis of these tables, various measures of the value of industries have been derived. One of these measures is found by applying the 'hypothetical extraction method', originally proposed by Strassert (Jahrb.Nat.Stat., 1968) and refined and applied by, among others, Milana (MetrEc., 1985), Groenewold, Hagger & Madden (Reg.Stud., 1987) and Dietzenbacher & Van der Linden (J.Reg.Sci., 1997). This approach has two major drawbacks. First, it is a purely static approach, in which technological progress does not play a role at all. Second, it assumes that output and employment levels are purely demand-determined. In this paper, I propose a biregional supply-side input-output model with two factors of production (high-skilled and low-skilled labor) and interregional interindustry technology spillovers. Applying hypothetical extraction methods to this model yields an alternative framework for identifying important sectors in a dynamic sense.

Identification of strategic industries: a dynamic perspective

Reliable estimates of the economy-wide losses associated with closedown of an industry are generally hard to obtain. In the input-output literature, numerous measures of the social value of industries were proposed. These measures are mostly based on comparative statics results, whereas a dynamic perspective seems much more in demand. In this paper, "hypothetical extraction" methods are used in a new dynamic input-output model of economic growth. This model also stresses the importance of technological linkages between industries and of international trade performance. The potential power of the dynamic extraction methodology is illustrated by simulation results for a hypothetical economy.

Globalisation: Ways to cope with the unequal distribution of gains and losses

Policy brief on globalisation. H2020 GI-NI project