Measuring Energy-saving Technological Change: International Trends and Differences

Abstract: Technological change is essential to balance economic growth and environmental sustainability. This study documents energy-saving technological change to understand the trends and differences therein in OECD countries. We estimate sector-level production functions with factor-augmenting technologies using cross-country and cross-industry panel data and shift-share instruments, thereby measuring energy-saving technological change for each country and sector. Our results show how the levels and growth rates of energy-saving technology vary across countries, sectors, and time. In addition, we evaluate the extent to which factor-augmenting technologies contribute to economic growth and how this contribution differs across countries and sectors.