Michiel de Nooij

The impact of energy conservation on technology and economic growth

We present a model of growth driven by energy use and endogenous factor-augmenting technological change. Both the rate and direction of technological progress are endogenous. The model captures four main stylised facts: total energy use has increased; energy use per hour worked increased slightly; energy efficiency has improved; and the value share of energy in GDP has steadily fallen. We study how energy conservation policies affect growth over time and in the long run. Policies that reduce the level of energy use are distinguished from those that reduce the growth rate of energy inputs. Although these policies may stimulate innovation, they unambiguously depress output levels. The former policy has no impact on long-run growth; the latter reduces long-run growth both in the short run and in the long run.

International comparisons of domestic energy consumption

Abstract Governments of many industrialized countries have committed themselves to substantially reduce their domestic emissions of greenhouse gases. Emission reductions can be achieved through technology- and/or sector-specific policies. To decide which part of the economy environmental policy should be concentrated at, insight must be gained into the relative importance of the various factors determining domestic aggregate fossil fuel consumption. By applying structural decomposition analysis (SDA) across nations, the factors causing per capita energy use to differ between countries can be identified, which sheds light on where potential energy-saving options can be found. To demonstrate the usefulness of between-country SDA, we apply the technique to a set of 8 OECD countries.

Bread or games? A social cost-benefit analysis of the World Cup bid of the Netherlands and the winning Russian bid

Many countries compete fiercely for the right to host mega-events like the World Cup. Proponents of hosting mega-events claim that yields economic gains. Many available studies focus on partial effects of hosting or concern ex post analyses. The authors utilize the existing literature to perform a detailed cost–benefit analysis (CBA) of the Netherlands bidding jointly with Belgium for the 2018 World Cup. The authors show that national pride and pleasure come at a price and financial gains are unlikely. Based on this CBA, the authors predict that the costs of the 2018 World Cup in Russia will also exceed the financial benefits.

Mega Sport Events: A Probabilistic Social Cost–Benefit Analysis of Bidding for the Games

The debates on whether to bid for organizing a mega sports event like the World Cup Soccer or the Olympic Games ignore either the bidding costs or the probability not to win the bid or both. In this short article, I discuss why the bidding costs and probabilities should be taken into account and I show for the Netherlands, which is currently discussing bidding for the Olympic Games of 2028, that the Net Present Value of organizing should be €557 million to €2.8 billion positive to compensate for the bidding costs and the probability of an unsuccessful bid.The debates on whether to bid for organizing a mega sports event like the World Cup Soccer or the Olympic Games ignore either the bidding costs or the probability not to win the bid or both. In this short article, I discuss why the bidding costs and probabilities should be taken into account and I show for the Netherlands, which is currently discussing bidding for the Olympic Games of 2028, that the Net Present Value of organizing should be €557 million to €2.8 billion positive to compensate for the bidding costs and the probability of an unsuccessful bid.

The Bidding Paradox: Why Politicians Favor Hosting Mega Sports Events Despite the Bleak Economic Prospects:

Politicians generally favor hosting mega sports events despite the discouraging evidence of financial benefits or direct economic gain. This paradox is surveyed from two different perspectives. First, we weighed the merits of the most prominent methods of economic analysis of mega sports events. Then, we discuss the ways in which politicians still manage to infer positive gains from hosting this type of event from the literature. Next, we look at a range of frequently intangible effects that could be used in the public debate before submitting a bid but that, paradoxically, rarely are. The most promising of these is making the people proud and happy. However, economists have so far been incapable of adequately valuing the effect of hosting a mega sport event based on happiness. Second, we analyzed the political process parallel to preparing a bid to understand why politicians are persistently keen to host, despite the bleak economic prospects.Politicians generally favor hosting mega sports events despite the discouraging evidence of financial benefits or direct economic gain. This paradox is surveyed from two different perspectives. First, we weighed the merits of the most prominent methods of economic analysis of mega sports events. Then, we discuss the ways in which politicians still manage to infer positive gains from hosting this type of event from the literature. Next, we look at a range of frequently intangible effects that could be used in the public debate before submitting a bid but that, paradoxically, rarely are. The most promising of these is making the people proud and happy. However, economists have so far been incapable of adequately valuing the effect of hosting a mega sport event based on happiness. Second, we analyzed the political process parallel to preparing a bid to understand why politicians are persistently keen to host, despite the bleak economic prospects.

The Bidding Paradox: How Economists and Politicians Might Agree on the Attractiveness of Mega Sports Events

The ambition to host mega sports events is (or can be) perfectly justifiable with various arguments. The most persistently used argument is the supposed financial or direct economic gain for the host economy, of which the compelling body of evidence is discouraging. This implies that the justification for hosting should come from a different, broader economic angle. This paper provides a critical discussion of the myriad of economic and frequently intangible effects that could be put forward in the public debate preceding the submission of a bid. Paradoxically, most of these effects are not, or infrequently employed in public debates.The ambition to host mega sports events is (or can be) perfectly justifiable with various arguments. The most persistently used argument is the supposed financial or direct economic gain for the host economy, of which the compelling body of evidence is discouraging. This implies that the justification for hosting should come from a different, broader economic angle. This paper provides a critical discussion of the myriad of economic and frequently intangible effects that could be put forward in the public debate preceding the submission of a bid. Paradoxically, most of these effects are not, or infrequently employed in public debates.