Divergences in the Long Run Trends in the Price of Energy and of Energy Services

The research demonstrates a historical divergence between the cost of energy commodities and the cost of the services they provide. While energy prices often rose due to taxes or shifts to higher-quality fuels, the prices of energy services generally declined since the Industrial Revolution due to technological efficiency gains. The author argues that using energy prices instead of service prices in economic models leads to incorrect estimates of consumer responsiveness and inaccurate forecasts of carbon dioxide emissions.

• From the 14th century until the Industrial Revolution, average energy and service prices trended upwards due to population growth and pressure on limited renewable resources, but declined thereafter as fossil fuels replaced them.
• Rising national average coal prices between 1600 and 1800 were not caused by resource scarcity, but by the growth of consumption in London and the imposition of taxes, which accounted for a third of the consumer price by the mid-18th century.
• The price of energy services has generally fallen much faster than the price of the energy sources used to provide them since 1800. For example, between 1800 and 2000, the price of lighting fell 4,380-fold, while the price of energy for lighting fell only 5.7-fold.
• Technological improvements often allow the price of a service to fall even when consumers switch to more expensive energy sources. In the 19th and 20th centuries, the shift to costlier fuels like gas and electricity for lighting still resulted in cheaper lighting services due to higher efficiency.

APA

Fouquet, R. (2010). Divergences in the Long Run Trends in the Price of Energy and of Energy Services. Basque Centre for Climate Change. https://www.bc3research.org/h6T8Uy8Nm4gFs0O/201003040132252091029309.pdf

Chicago

Fouquet, Roger. Divergences in the Long Run Trends in the Price of Energy and of Energy Services. Basque Centre for Climate Change, 2010. https://www.bc3research.org/h6T8Uy8Nm4gFs0O/201003040132252091029309.pdf.

Wikipedia

{{cite report |last1=Fouquet |first1=Roger |title=Divergences in the Long Run Trends in the Price of Energy and of Energy Services |publisher=Basque Centre for Climate Change |date=February 2010 |url=https://www.bc3research.org/h6T8Uy8Nm4gFs0O/201003040132252091029309.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{fouquet2010divergences, author = {Fouquet, Roger}, title = {{Divergences in the Long Run Trends in the Price of Energy and of Energy Services}}, institution = {Basque Centre for Climate Change}, year = {2010}, month = feb, url = {https://www.bc3research.org/h6T8Uy8Nm4gFs0O/201003040132252091029309.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }