Facebook LinkedIn Twitter

IAEE Members and subscribers to The Energy Journal: Please log in to access the full text article or receive discounted pricing for this article.

Economy-wide Estimates of Rebound Effects: Evidence from Panel Data

Energy consumption and greenhouse emissions across many countries have increased overtime despite widespread energy efficiency improvements. One explanation offered in the literature is the rebound effect (RE), however there is a debate about its magnitude and the appropriate model for estimating it. Using a combined stochastic frontier analysis (SFA) and two-stage dynamic panel data approach, we explore these two issues of magnitude and model for 55 countries over the period 1980 to 2010. Our central estimates indicate that in the short-run, 100% energy efficiency improvement is followed by 90% rebound in energy consumption, but in the long-run it leads to a 136% decrease in energy consumption. Overall, our estimated cross-country RE magnitudes indicate the need to consider or account for RE when energy forecasts and policy measures are derived from potential energy efficiency savings.

Download Executive Summary Purchase ( $25 )

Energy Specializations: Energy Modeling – Energy Data, Modeling, and Policy Analysis; Energy and the Economy – Energy as a Productive Input; Energy Efficiency – Residential and Commercial Buildings; Energy Efficiency – Transportation End-use ; Energy Efficiency – Energy Production and Transformation; Energy Efficiency – Barriers to Adoption

JEL Codes:
E61 - Policy Objectives; Policy Designs and Consistency; Policy Coordination
O13 - Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
Q59 - Environmental Economics: Other
L71 - Mining, Extraction, and Refining: Hydrocarbon Fuels

Keywords: Energy Efficiency, Input Distance Function, Panel Data, Rebound Effects, Stochastic Frontier Analysis

DOI: 10.5547/01956574.37.3.made

References: Reference information is available for this article. Join IAEE, log in, or purchase the article to view reference data.

Published in Volume 37, Number 3 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.