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"Rebound" Effects from Increased Energy Efficiency: A Time to Pause and Reflect

The phenomenon of rebound effects has sparked considerable academic, policy and press debate in recent years over the effectiveness of energy efficiency policy. There has been a huge surge in empirical studies claiming rebound effects of hugely varying magnitudes. The contention of this paper is that the lack of consensus in the literature is grounded in a rush to empirical estimation in the absence of solid analytical foundations. Focus on measuring a single "rebound" measure has led to a neglect of detail on precisely what type of change in energy use is considered in any one study and on the range of mechanisms governing the economy-wide response. This paper attempts to bring a reflective pause to the development of the rebound literature, with a view to identifying the key issues that policymakers need to understand and analysts need to focus their attention on.

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Energy Specializations: Petroleum – Policy and Regulation; Energy Efficiency; Electricity – Policy and Regulation

JEL Codes:
E60 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General
Q55 - Environmental Economics: Technological Innovation

Keywords: Energy efficiency, Rebound, Energy demand, Energy supply

DOI: 10.5547/01956574.34.4.2

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Published in Volume 34, Number 4 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.