## E

However, different energy services can be produced from a variety of energy resources. This suggests using production functions to represent the creation of energy services rather than simple energy efficiency coefficients. In fact, this will almost certainly best be accomplished using energy models similar to the MARKAL model (IEA 2008d). Rather than estimating the energy services produced from each energy resource, one would estimate the energy services producible from different quantities of energy resources.

From an economic perspective, increased prices signal scarcity. It follows, therefore, that if current generations bequeath higher energy prices to future generations, this, too, may indicate unsustainability. Energy price indices can be constructed for energy (Equation 20.6a) and for energy services (Equation 20.6b). Let p. be the price of energy type i (or j, if renewable) in time t, and let git be the use of nonrenewable energy. The simplest energy price index would take the form:

E—gitPit +E—qjt pt i=1 it j=1 ejt jt jt n 1 m 1

Ideally, one would estimate the quantity of energy services available to future generations at the same cost as the current generation must pay. This would imply holding the economic criterion for defining an energy resource constant at a certain price per joule. It is unlikely that the agencies with responsibility for quantifying energy resources will adopt this practice so precisely. More likely, these agencies will continue to use fuzzy economic criteria for defining energy resources. Therefore, it will probably be necessary to monitor separately the k k

## Post a comment