Construction of Meta-technology Cost Ratio-- The Comparison of Technology Across Countries under Economic Development and Emission of CO2
Date Issued
2011
Date
2011
Author(s)
Chen, Chai-Tzu
Abstract
The purpose of this paper is to construct a meta-technology cost ratio indicator by combining shadow price model and meta-frontier analysis under grouping different technological competitiveness index. The meta-technology cost ratio which can be used to measure the technical differences across countries under economic development and different emissions of carbon dioxide. The meta-technology cost ratio can not only reflect the improvement rate of carbon abatement cost by technological progress but also provide the exact amount of cost savings. Traditional meta-technology ratios are also computed for comparison.
Estimates results find that the performance of technical efficiency of each country increases as the technological competitiveness reaches to higher level. At the same time, the abatement cost for emission reductions will be declined and then increased later on. Those countries with the lowest technological competitiveness level result in the most technical improvement and the highest cost saving for carbon emission reductions. It shows that more resources are required for these countries to pursuit the higher technology levels. On the contrary, although there is similar abatement cost for emission reductions for countries with the highest and the lowest technology levels. Such cost saving is insignificantly for countries with high income however similar amount for low income countries has critical impact. As such, there is low incentive for high income countries to pursue technological advances.
Furthermore, simultaneously taking into account the technical efficiency and outputs levels, abatement cost for emission reductions will gradually increase over time and tend to approach the ideal abatement cost for emission reductions under different output levels. It is also found that income per capita, fossil energy use intensity, population density, and trade openness have positive impacts on the abatement cost of carbon emission reductions. The improvement of technical efficiency assistants the declining of the abatement cost of carbon reductions.
Subjects
directional distance function
shadow price model
economic cost
global completeness report
meta-frontier analysis
meta-technology ratio
SDGs
Type
thesis
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