A dynamic optimal management on economic energy efficiency in developing countries

Dong Wang, Kan Tao

    Research output: Chapter in Book/Conference paperConference paper

    Abstract

    This paper is based on the dynamic optimization methodology to investigate the economic energy efficiency issues in developing countries. The paper introduces some definitions about energy efficiency both in economics and physics, and establishes a quantitative way for measuring the economic energy efficiency. The linkage among economic energy efficiency, energy consumption and other macroeconomic variables is demonstrated primarily. Using the methodology of dynamic optimization, a maximum problem of economic energy efficiency over time, which is subjected to the extended Solow growth model and instantaneous investment rate, is modeled. In this model, the energy consumption is set as a control variable and the capital is regarded as a state variable. The analytic solutions can be derived and the diagrammatic analysis provides saddle-point equilibrium. A numerical simulation is also presented; meanwhile, the optimal paths of investment and energy consumption can be drawn. The dynamic optimization encourages governments in developing countries to pursue higher economic energy efficiency by controlling the energy consumption and regulating the investment state as it can conserve energy without influencing the achievement of steady state in terms of Solow model. If that, a sustainable development will be achieved. © Springer-Verlag Berlin Heidelberg 2014.
    Original languageEnglish
    Title of host publicationProceedings of the Seventh International Conference on Management Science and Engineering Lecture Notes in Electrical Engineering
    Place of PublicationGermany
    PublisherSpringer
    Pages1229-1240
    Volume242
    ISBN (Print)9783642400803
    DOIs
    Publication statusPublished - 2014
    EventA dynamic optimal management on economic energy efficiency in developing countries - Philadelphia USA
    Duration: 1 Jan 2014 → …

    Conference

    ConferenceA dynamic optimal management on economic energy efficiency in developing countries
    Period1/01/14 → …

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    Cite this

    Wang, D., & Tao, K. (2014). A dynamic optimal management on economic energy efficiency in developing countries. In Proceedings of the Seventh International Conference on Management Science and Engineering Lecture Notes in Electrical Engineering (Vol. 242, pp. 1229-1240). Germany: Springer. https://doi.org/10.1007/978-3-642-40081-0_104