Serletis, ApostolosTimilsina, GovindaVasetsky, Olexandr2012-03-192012-03-192009-08-01https://hdl.handle.net/10986/4226This paper estimates interfuel substitution elasticities in selected developing and industrialized economies at the national and sector levels. In doing so, it employs state-of-the-art techniques in microeconometrics, particularly the locally flexible normalized quadratic functional forms, and provides evidence consistent with neoclassical microeconomic theory. The results indicate that the interfuel substitution elasticities are consistently below unity, revealing the limited ability to substitute between major energy commodities (i.e., coal, oil, gas, and electricity). While the study finds some evidences of larger interfuel substitution potential in high-income economies as compared to that in the middle- and low-income economies in the industrial and transportation sectors, no such evidence is observed in the residential and electricity generation sectors or at the national level. The implication is that interfuel substitution depends on the structure of the economy, not the level of economic development. Moreover, a higher change in relative prices is needed to induce switching toward a lower carbon economy.CC BY 3.0 IGOAPPROACHAVAILABILITYCARBONCARBON DIOXIDECARBON DIOXIDE EMISSIONSCARBON EMISSIONSCLEAN ENERGYCLIMATE CHANGECLIMATE CHANGE POLICYCOALCOAL PRICECONSUMER DEMANDCRUDE OILDEMAND FOR ENERGYDEMAND FUNCTIONSDIESELELASTICITY OF SUBSTITUTIONELECTRICITYELECTRICITY GENERATIONELECTRICITY PRICESENERGY CONSUMPTIONENERGY DEMANDENERGY DEMAND ANALYSISENERGY ECONOMICSENERGY INPUTENERGY POLICYENERGY PRICESENERGY PROBLEMEXPENDITUREFOSSILFOSSIL FUELFOSSIL FUELSFUELFUEL OILFUEL PRICEFUEL PRICESFUEL QUANTITIESFUEL TYPESFUELSGASGASOLINEGASOLINE PRICEHIGH SULPHURHIGH SULPHUR FUEL OILHIGH-SULPHURHOUSEHOLD SECTORINCOMEINPUT PRICESINTERNATIONAL ENERGY AGENCYLIGHT FUEL OILNATURAL GASNATURAL GAS PRICESNATURAL RESOURCESOILOIL EQUIVALENTOIL PRICEOIL PRICESPETROLEUMPETROLEUM PRODUCTSPRICE CHANGEPRICE CHANGESPRICE ELASTICITIESPRICE ELASTICITYPRICE INCREASESPRICE INDEXPRICE OF COALPRICE OF ELECTRICITYPRICE OF GASPRICE OF GASOLINEPRICE OF OILQUANTITY OF FUELSOURCE OF ENERGYSTEAM COALSUBSTITUTESUBSTITUTESSUPPLY FUNCTIONSWORLD ENERGYWorld Bankhttps://doi.org/10.1596/1813-9450-5026