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•

Inducing Demand by Expanding Road Capacity: Controlling for the Rebound Effect

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Edmund J. Zolnik¹•Institutions (1)

George Mason University¹

04 May 2016-Annals of the American Association of Geographers

TL;DR: In this paper, the authors analyzed how additional road capacity and higher fuel economy interact to affect individual vehicle kilometers of travel (VKT) in metropolitan areas across the United States and adopted a novel methodological approach known as multilevel modeling to estimate a three-level VKT model.

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Abstract: Expanding road capacity and raising fuel economy are two policy mechanisms to mitigate greenhouse gas (GHG) emissions, but each is susceptible to feedback effects that might offset their overall effectiveness at promoting sustainable transportation. Expanding road capacity engenders more traffic through the induced demand effect and raising fuel economy encourages more use through the rebound effect. Research on each feedback effect is evident in the sustainable transportation literature. However, research on their interaction is lacking. To fill this void, this article analyzes how additional road capacity and higher fuel economy interact to affect individual vehicle kilometers of travel (VKT) in metropolitan areas across the United States. The article pools individual data from the respective 2001 and 2009 National Household Travel Surveys (NHTS) and adopts a novel methodological approach known as multilevel modeling to estimate a three-level VKT model that nests individuals within vehicles within metro...

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5 citations

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

...Empirical estimates of the rebound effect for private vehicles range from 10 percent to 30 percent (Greening, Greene, and Difiglio 2000; Sorrell, Dimitropoulos, and Sommerville 2009; Chakravarty, Dasgupta, and Roy 2013)....
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DOI•

Identification, quantification, and containment of energy-efficiency induced rebound effects: a research agenda: rebound research report 1

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Peter De Haan

01 Jan 2008

TL;DR: In this paper, the authors propose a method to solve the problem of homonymity in the context of homophysics, namely homophily, homology, and homology.

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Abstract: ......................................................................................................................................................................................................................................5

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5 citations

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

...The definition, identification and quantification of rebound effects are areas of ongoing research (Greening et al. 2000; Grepperud and Rasmussen 2000). Its precise definition varies among researchers, but the common denominator is that if a product or service becomes more efficient (regarding energy use or the use of some other resource), it will also become cheaper, which might give rise to increased demand (in Section 2.1 we will introduce our differentiation of three different causal mechanisms that might induce rebound effects): The rebound effect is the behavioral response to cost reductions of energy services as a result of energy efficiency gains. The behavioral response, for economists, includes changes in purchasing behavior as a result of changes in market prices. The rebound effect is also called take-back effect, backfire effect, or Khazzoom-Brookes effect (after the founding publications Khazzoom [1980] and Brookes [1978]). The term was first applied narrowly to the direct increase in demand for an energy service whose supply had increased as a result of improvements in technical energy efficiency (Khazzoom 1980). It has later been differentiated and expanded to include indirect and economy-wide effects. Greening et al. (2000) and Berkhout et al. (2000) distinguish three different categories of rebound effects (after de Haan et al. 2005 and Hertwich 2003): > Direct rebound effects: increased demand for the same service/product. This includes the direct effect or pure price effect. This effect is comprised of the substitution effect (i.e. the increase of demand for an energy service which becomes cheaper as a result of the increase in energy efficiency, i.e. the rebound as originally defined by Khazzoom), and the income effect (i.e. the increase in available income as a result of the reduced price of the energy service, which leads to other, energy consuming purchases). > Indirect (secondary) rebound effects: increased demand for other services as money (i.e., purchasing power) has become available. Also, technical energy efficiency improvements reduce the cost of energy services to industry, which leads to price reductions of goods and services and hence increased demand. This has also been termed the general equilibrium effect. > Macro-scale rebound effects (also called economy-wide effects, transformational effects): Structural effects on larger parts of the economy due to changed demand, production and distribution patterns. This includes marketclearing price, quantity adjustments (especially in fuel markets), and changes in technology that have the potential to change consumers' preferences, alter social institutions, and rearrange the organization of production. For example, if the energy efficiency of a car is increased by technological innovations, 100 km can be driven with less fuel and hence at a lower cost. This lower cost could have the consequence that people consume more car services (direct rebound effect), by (i) drive more often; (ii) driving longer trips; (iii) switching to larger cars, (iv) buying additional cars. The lower cost could also trigger recreational activities (indirect rebound effect), which in turn will lead to an adaptation of the over-all economic system (macro-scale effect). Identification of occurrence, and, if present, quantification of rebound effects are generally not straightforward. Most empirical studies focus on the direct rebound effects, because the other effects are difficult to isolate. Most work has been done on the effects of the introduction of energy-saving technologies, e.g., space heating (Haas and Biermayr 2000). Greening et al. (2000) present a survey of studies in the United States which indicates that the rebound effect is somewhere between 0 (for white goods) and 50% (for space cooling), but typically less then 30% (space heating,...
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...The definition, identification and quantification of rebound effects are areas of ongoing research (Greening et al. 2000; Grepperud and Rasmussen 2000). Its precise definition varies among researchers, but the common denominator is that if a product or service becomes more efficient (regarding energy use or the use of some other resource), it will also become cheaper, which might give rise to increased demand (in Section 2.1 we will introduce our differentiation of three different causal mechanisms that might induce rebound effects): The rebound effect is the behavioral response to cost reductions of energy services as a result of energy efficiency gains. The behavioral response, for economists, includes changes in purchasing behavior as a result of changes in market prices. The rebound effect is also called take-back effect, backfire effect, or Khazzoom-Brookes effect (after the founding publications Khazzoom [1980] and Brookes [1978])....
[...]
...The definition, identification and quantification of rebound effects are areas of ongoing research (Greening et al. 2000; Grepperud and Rasmussen 2000). Its precise definition varies among researchers, but the common denominator is that if a product or service becomes more efficient (regarding energy use or the use of some other resource), it will also become cheaper, which might give rise to increased demand (in Section 2.1 we will introduce our differentiation of three different causal mechanisms that might induce rebound effects): The rebound effect is the behavioral response to cost reductions of energy services as a result of energy efficiency gains. The behavioral response, for economists, includes changes in purchasing behavior as a result of changes in market prices. The rebound effect is also called take-back effect, backfire effect, or Khazzoom-Brookes effect (after the founding publications Khazzoom [1980] and Brookes [1978]). The term was first applied narrowly to the direct increase in demand for an energy service whose supply had increased as a result of improvements in technical energy efficiency (Khazzoom 1980). It has later been differentiated and expanded to include indirect and economy-wide effects. Greening et al. (2000) and Berkhout et al. (2000) distinguish three different categories of rebound effects (after de Haan et al....
[...]
...Greening et al. (2000) and Berkhout et al. (2000) distinguish three different categories of rebound effects (after de Haan et al. 2005 and Hertwich 2003): > Direct rebound effects: increased demand for the same service/product....
[...]
...The definition, identification and quantification of rebound effects are areas of ongoing research (Greening et al. 2000; Grepperud and Rasmussen 2000). Its precise definition varies among researchers, but the common denominator is that if a product or service becomes more efficient (regarding energy use or the use of some other resource), it will also become cheaper, which might give rise to increased demand (in Section 2.1 we will introduce our differentiation of three different causal mechanisms that might induce rebound effects): The rebound effect is the behavioral response to cost reductions of energy services as a result of energy efficiency gains. The behavioral response, for economists, includes changes in purchasing behavior as a result of changes in market prices. The rebound effect is also called take-back effect, backfire effect, or Khazzoom-Brookes effect (after the founding publications Khazzoom [1980] and Brookes [1978]). The term was first applied narrowly to the direct increase in demand for an energy service whose supply had increased as a result of improvements in technical energy efficiency (Khazzoom 1980). It has later been differentiated and expanded to include indirect and economy-wide effects. Greening et al. (2000) and Berkhout et al....
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Journal Article•DOI•

Does energy efficiency improve environmental quality in BRICS countries? Empirical evidence using dynamic panels with heterogeneous slopes.

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Ahmed Mohamed Dahir¹, Masnun Mahi²•Institutions (2)

Universiti Putra Malaysia¹, University of Malaya²

24 Sep 2021-Environmental Science and Pollution Research

TL;DR: In this paper, the authors investigated the role of energy efficiency on the environmental quality of BRICS countries and found that renewable energy has a crucial role in enhancing environmental quality in the long run with the negative impact of economic growth activities.

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Abstract: In a time of climate change, critically contributed by the increased global energy consumption, energy efficiency comes out as a critical factor in achieving sustainable growth for the countries. Given the fast economic advancement in the BRICS (Brazil, Russia, India, China, and South Africa) countries that have played a vital role in the global economy, energy usage, and climate governance, this study investigates the role of energy efficiency on the environmental quality of these countries. We proxy environmental quality with CO2 emissions, incorporate renewable energy in our models, and estimate the relationship with a long-panel data of 29 years (1990–2018). Our dynamic heterogeneous panel model findings confirm that energy efficiency significantly reduces CO2 emissions or improves environmental quality in the long run and the short run. Besides, we find that renewable energy has a crucial role in enhancing environmental quality in the long run with the negative impact of economic growth activities. Our findings contribute to the literature in a novel way facilitating the comprehension of the role of energy efficiency using a wide range of sophisticated techniques, thus providing robust results. For the policymakers, we humbly advocate strategies for the clean and sustainable economic transition based on our findings which has notable implications for the BRICS, other developing economies, and the world as a whole.

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5 citations

Environmental impacts of the digital economy: the case of austin, texas, 1990 - 2008

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Wei Tu

29 Aug 2005

5 citations

Journal Article•DOI•

Directed Technical Change and Energy Intensity Dynamics: Structural Change vs. Energy Efficiency

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Christian Haas¹, Karol Kempa²•Institutions (2)

University of Giessen¹, Frankfurt School of Finance & Management²

18 Jan 2016-Social Science Research Network

TL;DR: In this paper, the authors decompose changes in aggregate energy intensity into structural changes in the economy (Sector Effect) and within-sector energy efficiency improvements (Efficiency Effect).

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Abstract: This paper uses a theoretical model with Directed Technical Change to analyse the observed heterogeneous energy intensity developments. Based on the empirical evidence on the underlying drivers of energy intensity developments, we decompose changes in aggregate energy intensity into structural changes in the economy (Sector Effect) and within-sector energy efficiency improvements (Efficiency Effect). We analyse how energy price growth and the relative productivity of both sectors affect the direction of research and hence the relative importance of the aforementioned two effects. The relative importance of these effects is determined by energy price growth and relative sector productivity that drive the direction of research. In economies that are relatively more advanced in sectors with low energy intensities, the Sector Effect dominates energy intensity dynamics given no or moderate energy price growth. In contrast, the Efficiency Effect dominates energy intensity developments in economies with a high relative technological level within their energy-intensive industries if moderate energy price growth is above a certain threshold. We further show that temporal energy price shocks might induce a permanent redirection of innovation activities towards sectors with low-energy intensities.

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5 citations

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

...…related to the energy intensity literature is the so-called rebound effect, which can be decomposed into a direct rebound, an indirect rebound, and an economy wide (or growth) effect (Binswanger, 2001; Brookes, 2004; Greening et al., 2000; Khazzoom, 1980, 1987; Qiu, 2014; Schipper and Grubb, 2000)....
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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

[...]

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