Energy efficiency and consumption — the rebound effect — a survey

doi:10.1016/S0301-4215(00)00021-5

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Energy efficiency and consumption — the rebound effect — a survey

Journal Article•DOI•

Energy efficiency and consumption — the rebound effect — a survey

Lorna A. Greening¹, David L. Greene², Carmen Difiglio³•Institutions (3)

International Resources Group¹, Oak Ridge National Laboratory², International Energy Agency³

01 Jun 2000-Energy Policy (Elsevier)-Vol. 28, Iss: 6, pp 389-401

TL;DR: In this paper, a review of some of the relevant literature from the US offers definitions and identifies sources including direct, secondary, and economy-wide sources and concludes that the range of estimates for the size of the rebound effect is very low to moderate.

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About: This article is published in Energy Policy.The article was published on 2000-06-01. It has received 1867 citations till now. The article focuses on the topics: Rebound effect (conservation) & Energy consumption.

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Journal Article•DOI•

Energy Conservation More Effective With Rebound Policy

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Jeroen C.J.M. van den Bergh

01 Jan 2011-Environmental and Resource Economics

TL;DR: In this paper, the problem of indirect energy use effects, also known as rebound, of energy conservation is discussed, and four fundamental reasons for the existence of the rebound phenomenon are discussed.

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Abstract: This article sketches the problem of indirect energy use effects, also known as rebound, of energy conservation. There is widespread support for energy conservation, especially when it is voluntary, as this seems a cheap way to realize environmental and energy-climate goals. However, this overlooks the phenomenon of rebound. The topic of energy rebound has mainly attracted attention from energy analysts, but has been surprisingly neglected in environmental economics, even though economists generally are concerned with indirect or economy-wide impacts of technical change and policies. This paper presents definitions and interpretations of energy and environmental rebound, as well as four fundamental reasons for the existence of the rebound phenomenon. It further offers the most complete list of rebound pathways or mechanisms available in the literature. In addition, it discusses empirical estimates of rebound and addresses the implications of uncertainties and difficulties in assessing rebound. Suggestions are offered for strategies and public policies to contain rebound. It is advised that rebound evaluation is an essential part of environmental policy and project assessments. As opposed to earlier studies, this paper stresses the relevance of the distinction between energy conservation resulting from autonomous demand changes and from efficiency improvements in technology/equipment. In addition, it argues that rebound is especially relevant for developing countries.

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237 citations

Cites background from "Energy efficiency and consumption —..."

...Greening et al. (2000) make a distinction between four categories of market responses to changes in fuel efficiency, namely direct rebound effects (cost or price fall effect on demand), secondary fuel use effects (on other markets, mainly through re-spending), economy-wide effects (defined by them as market-clearing price and quantity adjustments, especially in fuel markets), and transformational effects (preference change, partly induced by technological change)....
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...Greening et al. (2000) make a distinction between four categories of market responses to changes in fuel efficiency, namely direct rebound effects (cost or price fall effect on demand), secondary fuel use effects (on other markets, mainly through re-spending), economy-wide effects (defined by them…...
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...Greening et al. (2000) make a distinction between four categories of market responses to changes in fuel efficiency, namely direct rebound effects (cost or price fall effect on demand), secondary fuel use effects (on other markets, mainly through re-spending), economy-wide effects (defined by them as market-clearing price and quantity adjustments, especially in fuel markets), and transformational effects (preference change, partly induced by technological change). However, this distinction is not entirely satisfactory. For example, economy-wide effects really cover all possible effects, on inputs, productivity, incomes, expenditures, prices and quantities. Sorrell (2007) distinguishes between two types of effects of improved energy efficiency: direct effects, namely more intensive use of equipment, and indirect effects, basically all others....
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...In addition, several studies find relatively small rebound effects, in the range of 10–20% (Schipper and Grubb 2000; Greening et al. 2000; Small and Van Dender 2007)....
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Journal Article•DOI•

The sufficiency strategy: Would rich-world frugality lower environmental impact?

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Blake Alcott

01 Feb 2008-Ecological Economics

TL;DR: In this paper, the authors identify a similar rebound when the affluence factor is autonomously lowered: the lower initial demand lowers prices, which in turn stimulates new demand by others, and since all changes in right-side factors of the I ǫ=ǫ PAT equation change other right side factors, such indirect attacks on impact should be abandoned in favor of supply and emissions quotas.

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237 citations

Journal Article•DOI•

Fuel conserving (and using) production functions

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Harry D. Saunders

01 Sep 2008-Energy Economics

TL;DR: In this article, the authors compare eight production/cost functions used or potentially useful for exploring how energy efficiency gains affect energy consumption, and suggest practitioners restrict themselves to either the Gallant (Fourier) or the Generalized Leontief/Symmetric Generalized Barnett cost functions as being sufficiently "rebound flexible".

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232 citations

Journal Article•DOI•

The impact of increased efficiency in the industrial use of energy: A computable general equilibrium analysis for the United Kingdom ☆

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Grant Allan, Nick Hanley¹, Peter McGregor, J. Kim Swales², Karen Turner² - Show less +1 more•Institutions (2)

University of Stirling¹, University of Strathclyde²

01 Jul 2007-Energy Economics

TL;DR: In this paper, the authors use an economy-energy-environment computable general equilibrium (CGE) model for the UK to measure the impact of a 5% across the board improvement in the efficiency of energy use in all production sectors.

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231 citations

Cites background from "Energy efficiency and consumption —..."

...The Greening et al (2000) extensive survey of US work reports some studies that have found an elasticity of substitution greater than one (Chang, 1994; Hazilla and Kop, 1986), but the vast majority of estimates are less than unity....
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...This decomposition of rebound into direct, indirect and economy-wide effects is first made by Greening et al (2000), who also point to a shortage of empirical studies on the “non-direct” rebound effects....
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...Empirical work has concentrated on measuring rebound effects in consumer services (Dufournaud et al., 1994; Greening et al, 2000; Small and Van Dender, 2005; Zein-Elabdin, 1997)....
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Journal Article•DOI•

Estimating the rebound effect in US manufacturing energy consumption

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Jan Bentzen¹•Institutions (1)

Aarhus University¹

01 Jan 2004-Energy Economics

TL;DR: In this paper, the authors estimate the rebound effect for the US manufacturing sector using time series data applying the dynamic OLS method (DOLS) and find that when allowing for asymmetric price effects, the recovery effect is approximately 24% for the United States manufacturing sector.

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228 citations

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References

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Book•

Economics and consumer behavior

[...]

Angus Deaton, John Muellbauer

01 Jan 1980

TL;DR: Deaton and Muellbauer as mentioned in this paper introduced generations of students to the economic theory of consumer behaviour and used it in applied econometrics, including consumer index numbers, household characteristics, demand, and household welfare comparisons.

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Abstract: This classic text has introduced generations of students to the economic theory of consumer behaviour. Written by 2015 Nobel Laureate Angus Deaton and John Muellbauer, the book begins with a self-contained presentation of the basic theory and its use in applied econometrics. These early chapters also include elementary extensions of the theory to labour supply, durable goods, the consumption function, and rationing. The rest of the book is divided into three parts. In the first of these the authors discuss restrictions on choice and aggregation problems. The next part consists of chapters on consumer index numbers; household characteristics, demand, and household welfare comparisons; and social welfare and inequality. The last part extends the coverage of consumer behaviour to include the quality of goods and household production theory, labour supply and human capital theory, the consumption function and intertemporal choice, the demand for durable goods, and choice under uncertainty.

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3,952 citations

Journal Article•DOI•

Technology, Prices, and the Derived Demand for Energy

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Ernst R. Berndt, David O. Wood

01 Aug 1975-The Review of Economics and Statistics

TL;DR: In this article, an industrial demand for energy is essentially a derived demand: the firm's demand for the energy is an input, derived from demand for a firm's output, which is an output.

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Abstract: Industrial demand for energy is essentially a derived demand: the firm's demand for energy is an input is derived from demand for the firm's output. Inputs other than energy typically also enter the firm's production process. Since firms tend to choose that bundle of inputs which minimized the total cost of producing a giving level of output, the derived demand for inputs, including energy, depends on the level of output, the submitions possibilies among inputs allow by production technology, and the relative prices of all inputs.

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1,422 citations

Journal Article•DOI•

Individual Discount Rates and the Purchase and Utilization of Energy-Using Durables

[...]

Jerry A. Hausman

01 Jan 1979-The Bell Journal of Economics

TL;DR: In this article, a model of individual behavior in the purchase and utilization of energy-using durables is presented, where the tradeoff between capital costs for more energy efficient appliances and operating costs for the appliances is emphasized.

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Abstract: This article presents a model of individual behavior in the purchase and utilization of energy-using durables. The tradeoff between capital costs for more energy efficient appliances and operating costs for the appliances is emphasized. Using data on both the purchase and utilization of room air conditioners, the model is applied to a sample of households. The utilization equation indicates a relatively low price elasticity. The purchase equation, based on a discrete choice model, demonstrates that individuals do trade off capital costs and expected operating costs. The results also show that individuals use a discount rate of about 20 percent in making the tradeoff decision and that the discount rate varies inversely with income.

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1,361 citations

Journal Article•DOI•

Economic Implications of Mandated Efficiency in Standards for Household Appliances

[...]

J. Daniel Khazzoom

01 Jan 1980-The Energy Journal

TL;DR: In this article, the authors argue that the indiscriminate use of mandated standards will backfire, but a mix of selective standards and reliance on prices as a restraint can be effective.

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Abstract: Regulations which mandate appliance efficiency standards may be based on calculations which exaggerate the potential energy savings. Improved efficiency can, in fact, increase demand enough to be counterproductive unless the standards are applied selectively. As appliances improve, they are used more, new stock is demanded, and the demand for and use of related equipment increases. The policy implications of these empirical studies are that the indiscriminate use of mandated standards will backfire, but a mix of selective standards and reliance on prices as a restraint can be effective. 11 references, 5 figures, 2 tables. (DCK)

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802 citations

Posted Content•

Qualitative Choice Analysis: Theory, Econometrics, and an Application to Automobile Demand

[...]

Kenneth Train

01 Jan 1985-Research Papers in Economics

TL;DR: In this article, the authors present a detailed study of automobile demand and use, presenting forecasts based on the powerful new techniques of qualitative choice analysis and standard regression techniques, which are combined to analyze situations that neither alone can accurately forecast.

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Abstract: This book addresses two significant research areas in an interdependent fashion. It is first of all a comprehensive but concise text that covers the recently developed and widely applicable methods of qualitative choice analysis, illustrating the general theory through simulation models of automobile demand and use. It is also a detailed study of automobile demand and use, presenting forecasts based on these powerful new techniques. The book develops the general principles that underlie qualitative choice models that are now being applied in numerous fields in addition to transportation, such as housing, labor, energy, communications, and criminology. The general form, derivation, and estimation of qualitative choice models are explained, and the major models - logit, probit, and GEV - are discussed in detail. And continuous/discrete models are introduced. In these, qualitative choice methods and standard regression techniques are combined to analyze situations that neither alone can accurately forecast. Summarizing previous research on auto demand, the book shows how qualitative choice methods can be used by applying them to specific auto-related decisions as the aggregate of individuals' choices. The simulation model that is constructed is a significant improvement over older models, and should prove more useful to agencies and organizations requiring accurate forecasting of auto demand and use for planning and policy development. The book concludes with an actual case study based on a model designed for the investigations of the California Energy Commission.

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726 citations