Major economies are competing to dominate the emerging energy economy and governments, regardless of their position on the plan-market spectrum, play a critical and distinctive role in driving technology development and adoption. The technology-energy-environment-economy (TEEE or TChain) interplay has profound implications for the world economy and presents very distinct analytical challenges both to social scientists and policy makers. We used input-output and computable general equilibrium models (CGEs) to develop an integrated modeling framework to analyze TChain elements and simulate development scenarios in the energy rich regions. This research funded by the U.S. National Science Foundation compared two Energy Rich Regions (ERRs) of West Virginia and Shanxi - within two distinct economic systems of the U.S. and China - as they develop and move toward adopting new energy technologies and respond to changing environmental realities and globalization processes.

The prominent role of government of China in country’s sustained economic growth in recent decades and the same time the dismal performance of Western style market economies has rekindled plan-market debate in economic development circles again. Many developing countries are closely watching and scrutinizing East (China) and West (US & Europe) prescribed development model, often with contentious debate among their scholars and activists each subscribing to one or the other model. This debate is particularly acute in energy rich economies, where the control of windfall revenues has often led to what Askari 2013 calls a form of collaborative colonialism. For example, oil rich economies of the Persian Gulf (particularly those with few non-oil resources, such as Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates) have looked to the West for development direction at the same time as clinging to an all dominant central government much like those in the East. The optimal mix of private and public sector in the economy and the appropriate role of government is an important question, particularly in economies that largely depend on exhaustible energy resources, and there is a large interest to incorporate these issues in economic development simulation models.

With a focus on energy-economy interactions, this paper introduces energy rich regions (ERRs), describes TEEE chain as an integrated modeling framework for ERRs, and reports results from applying an optimal depletion CGE model to a typical ERR under two distinctive economic structures: planned and a market economy.
 

Economic Development,Integrated Model,Energy-Economy