The sustainability of ‘sustainable’ energy use: historical evidence on the relationship between economic growth and renewable energy

The sustainability of ‘sustainable’ energy use: historical evidence on the relationship between economic growth and renewable energy Roger Fouquet 1.1 INTRODUCTION Throughout history, energy resources have played an important role in influencing the rate of economic growth and development. It has been seen as a boost to long-term growth when new energy sources and technologies were deployed and created abundance (Rosenberg, 1998; Crafts, 2004; Ayres and Warr, 2009). They have also been responsible for slowing down economies in times of perceived scarcity (Nordhaus, 1980). Given the interest in a transition to a low carbon economy, it is appropriate to ask about the role that energy might play in this new context. At present, one can only speculate about the relationship between economic growth and development and low carbon energy resources. A transition to low carbon energy sources may provide a boost to the economy. Alternatively, an increasing dependence on renewable energy will imply different levels of resource availability and may create new limits on economic growth. Or, meeting the economy’s energy needs through renewable resources may impose substantially higher costs. Many of the models of long-run energy use have presented a cheap, non-renewable energy source and an expensive renewable energy source as the backstop technology (Nordhaus, 1973; Dasgupta and Heal, 1974; Stiglitz, 1974; Heal, 1976; Chakravorty et al., 1997). A transition to the more expensive renewable energy source means that firms would have to charge more for their products and customers’ budgets would not stretch as far. Thus, it..