Showing papers on "Rebound effect (conservation) published in 2009"

The macroeconomic rebound effect and the world economy

Abstract: This paper examines the macroeconomic rebound effect for the global economy arising from energy-efficiency policies. Such policies are expected to be a leading component of climate policy portfolios being proposed and adopted in order to achieve climate stabilisation targets for 2020, 2030 and 2050, such as the G8 50% reduction target by 2050. We apply the global “New Economics” or Post Keynesian model E3MG, developing the version reported in IPCC AR4 WG3. The rebound effect refers to the idea that some or all of the expected reductions in energy consumption as a result of energy-efficiency improvements are offset by an increasing demand for energy services, arising from reductions in the effective price of energy services resulting from those improvements. As policies to stimulate energy-efficiency improvements are a key part of climate-change policies, the likely magnitude of any rebound effect is of great importance to assessing the effectiveness of those policies. The literature distinguishes three types of rebound effect from energy-efficiency improvements: direct, indirect and economy-wide. The macroeconomic rebound effect, which is the focus of this paper, is the combination of the indirect and economy-wide effects. Estimates of the effects of no-regrets efficiency policies are reported by the International Energy Agency in World Energy Outlook, 2006, and synthesised in the IPCC AR4 WG3 report. We analyse policies for the transport, residential and services buildings and industrial sectors of the economy for the post-2012 period, 2013–2030. The estimated direct rebound effect, implicit in the IEA WEO/IPCC AR4 estimates, is treated as exogenous, based on estimates from the literature, globally about 10%. The total rebound effect, however, is 31% by 2020 rising to 52% by 2030. The total effect includes the direct effect and the effects of (1) the lower cost of energy on energy demand in the three broad sectors as well as of (2) the extra consumers’ expenditure from higher (implicit) real income and (3) the extra energy-efficiency investments. The rebound effects build up over time as the economic system adapts to the higher real incomes from the energy savings and the investments.

Energy efficiency and sustainable consumption : the rebound effect

Abstract: Introduction S.Sorrell and H.Herring PART I: MICRO REBOUND EFFECTS The Evidence for Direct Rebound Effects S.Sorrell Fuel Efficiency and Automobile Travel in Germany: An Econometric Analysis of the Rebound Effect M.Frondel , J.Peters and C.Vance PART II: MACRO REBOUND EFFECTS Modelling the Economy-Wide Rebound Effect G.Allen , M.Gilmartin , P.G.McGregor , J.K.Swales and K.Turner Specifying Technology for Analyzing Rebound H.Saunders Energy Efficiency and Economic Growth: The 'Rebound Effect' as a Driver R.U.Ayres and B.Warr Exploring Jevons' Paradox S.Sorrell PART III: REBOUND EFFECTS AND SUSTAINABLE CONSUMPTION Time-Use Rebound Effects: An Activity-Based View of Consumption M.Jalas Rebound and Rational Public Policy Making R.Levett Avoiding Rebound through a Steady-State Economy J.S.Norgard Sufficiency and the Rebound Effect H.Herring Conclusion S.Sorrell & H.Herring

A General Equilibrium View of Global Rebound Effects

Abstract: How do energy efficiency gains affect energy consumption? The effects are generally called “rebound effects” in the literature. Previous studies have extensively focused on only part of the global economy to study rebound effects, e.g. energy consumption by households, one industry, or one country. However, since the global economy is highly connected among countries, these studies may lead to misleading conclusions if the rebound effects in the rest of the economy are significant. Recently Saunders (2008) analyzes the demand side by taking the global economy as a whole. Wei (2007) also provides a general analysis by using Cobb–Douglas production functions for the global economy. The present article expands Wei (2007) general analysis to explore the rebound effects from an economist's viewpoint by taking the global economy as a whole and applying general forms of production functions. The analysis provides new insights related to rebound effects: we highlight the role of energy supply as a determinant of rebound. We show that the substitution between energy resources and other productive resources is more relevant to long term rebound. We predict that long term rebound may be lower than short term rebound. And we also discover that super-conservation can happen in both the short term and the long term.

Quantifying the rebound effects of energy efficiency improvements and energy conserving behaviour in Sweden

Abstract: Doubts have recurrently been raised on the extent to which energy efficiency can reduce the demand for energy. Improvements in efficiency may cause so-called rebound effects by reducing the prices of energy services as well as by increasing the budget for consumption of other goods and services. The magnitude of such effects is crucial to whether energy efficiency should be a strategy for environmental policy or not. This paper aims to derive a general expression of the rebound effects of household consumption in a parameterised form where available data can be tested. The paper analyses how different parameter assumptions affect the quantification of rebound effects and what may be reasonable ranges. Income effects are quantified using data from the Swedish Household Budget Survey of different goods and services split on income classes. The changes in consumption patterns with increasing income are used to establish the composition of marginal consumption. Combined with energy intensities derived from input–output analysis, this gives a model of how money saved on energy use in one sector may lead to increased energy use in other sectors. The total rebound effects of energy efficiency improvements appear to be in the range 5–15% in most cases, but these results are fairly sensitive to assumptions of energy service price elasticities. Cases with low or negative capital costs for energy efficiency improvements may also result in much higher rebound effects as the income effects become more important. Energy-conserving behaviour (reduced energy service demand) affecting direct energy use such as heating and transport gives rise to rebound effects in the order of 10–20%, depending on the household expenditure per primary energy for different fuels and energy carriers.

Traveled Distance, Stock, and Fuel Efficiency of Private Vehicles in Canada: Price Elasticities and Rebound Effect

Abstract: This paper presents estimates of the rebound effect and other elasticities for the Canadian light-duty vehicle fleet using panel data at the provincial level from 1990 to 2004. We estimate a simultaneous three-equation model of aggregate demand for vehicle kilometers traveled, vehicle stock and fuel efficiency. Price and income elasticities obtained are broadly consistent with those reported in the literature. Among other results, an increase in the fuel price of 10% would reduce driving by ~2% in the long term and by 1% the average fuel consumption rate. Estimates of the short- and long-term rebound effects are ~8 and 20%, respectively. We also find that an increase in the gross domestic product per capita of 10% would cause an increase in driving distance of 2–3% and an increase of up to 4% in vehicle stock per adult. In terms of policy implications, our results suggest that: (1) the effectiveness of new fuel efficiency standards will be somewhat mitigated by the rebound effect and (2) fuel price increases have limited impacts on gasoline demand.

The effect of energy end-use efficiency improvement on China’s energy use and CO2 emissions: a CGE model-based analysis

Abstract: With its rapid economic growth, China is now confronted with soaring pressure from both its energy supply and the environment. To deal with this conflict, energy end-use efficiency improvement is now promoted by the government as an emphasis for future energy saving. This study explores the general equilibrium effect of energy end-use efficiency improvement on China’s economy, energy use, and CO2 emissions. This paper develops a static, multisector computable general equilibrium model (CGE) for China, with specific detail in energy use and with the embodiment of energy efficiency. In order to explore the ability of subsidizing non-fossil-generated electricity on moderating potential rebound effects, in this model, the electricity sector was deconstructed into five specific generation activities using bottom–up data from the Chinese electricity industry. The model is calibrated into a 16-sector Chinese Social Accounting Matrix for the year 2002. In the analysis, seven scenarios were established: business as usual, solely efficiency improvement, and five policy scenarios (taxing carbon, subsidized hydropower, subsidized nuclear power, combination of taxing carbon and subsidized hydropower, combination of taxing carbon and subsidized nuclear power). Results show that a sectoral-uniform improvement of energy end-use efficiency will increase rather than decrease the total energy consumption and CO2 emissions. The sensitivity analysis of sectoral efficiency improvement shows that efficiency improvements happened in different sectors may have obvious different extents of rebound. The three sectors, whose efficient improvements do not drive-up total national energy use and CO2 emissions, include Iron and Steel, Building Materials, and Construction. Thus, the improvement of energy end-use efficiency should be sectoral specific. When differentiating the sectoral energy-saving goal, not only the saving potential of each sector but also its potential to ease the total rebound should be taken into account. Moreover, since the potential efficiency improvement for a sector over a certain period will be limited, technology measures should work along with a specific policy to neutralize the rebound effect. Results of policy analysis show that one relatively enhanced way is to combine carbon taxing with subsidized hydropower.

Do High Oil Prices Matter? Evidence on the Mobility Behavior of German Households

Abstract: Focusing on travel survey data from Germany, this paper investigates the determinants of automobile travel, with the specific aim of quantifying the effects of fuel prices and fuel economy. The analysis is predicated on the notion that car mileage is a two-stage decision process, comprising the discrete choice of whether to own a car and the continuous choice of distance traveled. To capture this process, we employ censored regression models consisting of Probit and OLS estimators, which allows us to gauge the extent to which sample selectivity may bias the results. Our elasticity estimates indicate a significant positive association between increased fuel economy and increased driving, and a significantly negative fuel-price elasticity, which ranges between − 35% and − 41%. Taken together, these results suggest that fuel taxes are likely to be a more effective policy measure in reducing emissions than fuel-efficiency standards.

Modifying the Rebound: It depends! Explaining Mobility Behaviour on the Basis of the German Socio-Economic Panel

Abstract: We address the empirical question to which extent higher fuel efficiency of cars affects additional travel and how this behavioural aspect is modified by additional variables. The data set used to estimate a theoretical model of the rebound effect covers two panel waves, 1998 and 2003, taken from the German Socio-Economic Panel (SOEP). To take full advantage of the information in the data available, and to avoid problems due to possible selection effects, we estimated an unbalanced two-wave random effects panel model. Our results suggest that in line with the rebound hypothesis, there is a negative effect of car efficiency on the kilometers driven. That is, the lower the fuel consumption, the larger the driven distance. However, contrasting recent empirical literature about the rebound effect in the transportation sector, this seems to be true only for cars with a consumption of more than roughly eight liters per hundred kilometers. In addition, we find a positive diesel effect, which implies that owning a diesel engined car, has a positive effect on the driven distance. Both effects can be interpreted as support for the rebound hypothesis, although not in a simple linear way. Moreover, it can be shown that some “soft” variables such as certain attitudes towards the environment tend to amplify this non-linear rebound effect. Our results support the general direction of the rebound effect on households travel activities. But because of the remaining political relevance of the rebound effect, they also highlight the importance of accounting for additional behavioural variables which tend to influence individual mobility behaviour. Hence, the classical interpretation of the rebound as a linear effect of advances in fuel economy on individual travel has to be questioned.

Avoiding Rebound through a Steady-State Economy

Abstract: The debate on the rebound effect as presented in most chapters in this book is based upon experience from the past more than visions of the future. The analyses are dominated by conventional economic theory, which implicitly assumes insatiable demand for energy services. Material consumption is considered to be limited primarily by productive capacity with little concern for ecological costs and limits. In such a development aiming at unlimited growth it would from a long-term environmental perspective be close to irrelevant to reach for more efficient use of energy, since it would only buy some time. From this perspective, the environmental problem with the rebound effect is not the higher energy efficiency, which pushes towards lower flows of resources through the economy, but rather the conventional economy which rebounds the savings, because of its quest for higher flows.

Sufficiency and the Rebound Effect

Abstract: In this book so far there has been little if any discussion of why consumers might want to invest in energy efficiency. The most obvious, and common, reason is to save money which, after repaying the costs of investment, can then be spent on other activities, all of which use energy to some extent. Hence the rebound is never zero. But this chapter is not going to discuss the economic reasons for investment by consumers, but instead will focus on the non-economic, chiefly environmental and ethical, reasons for pursuing energy efficiency.

Modelling the Economy-wide Rebound Effect

Abstract: In this chapter we address the question: how large are the system-wide rebound effects likely to be for general improvements in energy efficiency in production activities in a developed economy? Most studies focus on the direct rebound effects, often in the context of the demand for consumer services (Greening et al., 2000; Sorrell, 2007). This restricts the analysis solely to the energy required to provide the consumer services to which the efficiency improvement directly applies. There is, to date, comparatively little evidence on the scale of non-direct or system-wide effects that reflect the relative price, output and income changes induced by improvements in energy efficiency (Greening et al., 2000).

The Evidence for Direct Rebound Effects

Abstract: Direct rebound effects relate to individual energy services, such as heating, lighting and refrigeration and are confined to the energy required to provide that service. Since improved energy efficiency will reduce the marginal cost of supplying the relevant service it could lead to an increase in the consumption of that service. For example, consumers may choose to drive further and/or more often following the purchase of a fuel-efficient car because the operating cost per kilometre has fallen. Similarly, consumers may choose to heat their homes for longer periods and/or to a higher temperature following the installation of loft insulation, because the operating cost per square metre has fallen. The extent to which this occurs may be expected to vary widely from one energy service to another, from one circumstance to another and from one time period to another. But any increase in energy service consumption will reduce the ‘energy savings’ achieved by the energy-efficiency improvement. In some circumstances it could offset those savings altogether (backfire).

Time-use Rebound Effects: an Activity-based View of Consumption

Abstract: Energy-efficiency innovations frequently contribute to and depend on changes in the time allocation of households. In this chapter I argue that a focus on such changes in time use can broaden the scope of the rebound debate and help to account for transformative types of rebound effects. In simple terms, I argue that one can reframe the debate by shifting the focus from monetary effects to the time use of individual consumers.

New insights into rebound effects : theory and empirical evidence

Abstract: The main objective of the thesis is to seek insights into the theory, and provide empirical evidence of rebound effects. Rebound effects reduce the environmental benefits of environmental policies and household behaviour changes. In particular, win-win demand side measures, in the form of energy efficiency and household consumption pattern changes, are seen as ways for households and businesses to save money and the environment. However, these savings have environmental impacts when spent, which are known as rebound effects. This is an area that has been widely neglected by policy makers. This work extends the rebound effect literature in three important ways, (1) it incorporates the potential for variation of rebound effects with household income level, (2) it enables the isolation of direct and indirect effects for cases of energy efficient technology adoption, and examines the relationship between these two component effects, and (3) it expands the scope of rebound effect analysis to include government taxes and subsidies. MACROBUTTON HTMLDirect Using a case study approach it is found that the rebound effect from household consumption pattern changes targeted at electricity is between 5 and 10%. For consumption pattern changes with reduced vehicle fuel use, the rebound effect is in the order of 20 to 30%. Higher income households in general are found to have a lower total rebound effect; however the indirect effect becomes relatively more significant at higher household income levels. In the win-lose case of domestic photovoltaic electricity generation, it is demonstrated that negative rebound effects can occur, which can potentially amplify the environmental benefits of this action. The rebound effect from a carbon tax, which occurs due to the re-spending of raised revenues, was found to be in the range of 11-32%. Taxes and transfers between households of different income levels also have environmental implications. For example, a more progressive tax structure, with increased low income welfare payments is likely to increase greenhouse gas emissions. Subsidies aimed at encouraging environmentally friendly consumption habits are also subject to rebound effects, as they constitute a substitution of government expenditure for household expenditure. For policy makers, these findings point to the need to incorporate rebound effects in the environmental policy evaluation process.’

The Global Rebound Effect Versus California’s Low-Carbon Fuel Standard

Abstract: Displacing gasoline with a new source of biofuel, as California’s low-carbon fuel standard proposes to do, will reduce the global demand for oil. This will reduce the world oil price, which will cause an increase in oil use outside of California - the global rebound effect. Conventional wisdom views this effect as negligible.But the global rebound effect applies to discovering and pumping new oil, just as it applies to producing new biofuel. And if rebound is negligible, this paper shows that pumping new oil harms the environment negligibly, contradicting conventional wisdom.In fact, the global rebound effect is likely to be near 25 percent or greater, and biofuels will likely reduce carbon by that much less than anticipated. Some biofuels may be credited with helping, even while they harm the climate.

Fuel Efficiency and Automobile Travel in Germany: Don’t Forget the Rebound Effect!

Abstract: The improvement of energy efficiency is often asserted to be one of the most promising options to reduce both the usage of energy and associated negative externalities, such as carbon dioxide emissions (CO2). Ever since the creation of the Corporate Average Fuel Economy (CAFE) standards in 1975, this assertion has been a mainstay of energy policy in the United States. In recent years, it has also found increasing currency in Europe, as attested to by the voluntary agreement negotiated in 1999 between the European Commission (EC) and the European Automobile Manufacturers Association, stipulating the reduction of average emissions to a target level of 140 g CO2/km by 2008. The EC is additionally considering legislation that would set a target of 120 g CO2/km by 2012.

Specifying Technology for Analysing Rebound

Abstract: Especially in the industrial and commercial sectors, economists seeking to understand rebound phenomena rely on the specification of what they call production functions As part of this endeavour, they need to mathematically depict the technology gains that may lead to rebound In this chapter, we attempt to bridge the gap between an engineering understanding of what these technology gains must look like in concrete terms and what they must look like to be implementable in an economic representation

An Estimation Method of Rebound Effect Based on Entropy Principle

Abstract: 122 Vol.5 No.1 January 2009 1. はじめに 「持続可能な生産と消費」1)は、地球温暖化や資源枯渇、 エネルギーなどの地球的規模の問題を解決するためのコン セプトとして近年重要視されてきている。これまでも、産 業界では「持続可能な生産」を目指して、環境効率、つま り単位環境負荷あたりの価値を向上した製品・サービスの エコデザイン2)や、生産の現場における省エネルギー、 廃棄物削減などを行ってきた。しかし、持続可能な社会の 構築には未だ不十分な面がある。その背景には消費者のラ イフスタイルの変化、例えば、家電製品が一家に一台から、 一人に一台に行き渡るような、家電の個人所有化の進行や、 単身生活者、夜型生活者の増加といった生活の多様化があ る。持続可能な社会を目指すためには、生産側だけでなく、 消費側も持続可能な形に移行する必要がある。 Synopsis: Objective. Recently, “sustainable production and consumption” has been advocated. It is an approach from not only the perspective of “sustainable production”, which has already been employed, but also from the perspective of consumption with a view to achieving sustainability. The “rebound effect” is discussed from the perspective of “sustainable consumption”. In General, rebound effect means secondary environmental load derived from efficiency improvement. Several types of rebound effect have been reported. For instance, when a new goods or service generate surplus time and cost, they might be spent on the other action that brings about large environmental load. According to Greening (2000), such type of rebound effect is called “indirect rebound effect”. In this paper, we propose a new method of estimating the indirect rebound effect that utilizes a consumer behavior model and embodied intensity data of behavior. This mathematical model is based on the entropy principle from the field of information theory. The model calculates the every day life pattern of a target group on the basis of statistical data on behavior when an event brings about the rebound effect under time and budget constraints. The environmental load resulting from change in behavior can be estimated. Results and Discussion. The subject of our case study is teleworking and the rebound effect for the time generated by telecommuting was presumed. The case study reflects the fact that the change in life behavior pattern attributable to telecommuting leads to a reduction in CO2 emissions as a result of the estimation even if the rebound effect attributable to telework is taken into account. There is an advantage in that the behavior of the target group can be represented on the basis of statistical data, although the proposed model has a limitation in that only the rebound effect under constraints of time and cost is considered. Conclusions. This paper proposed a new method of estimating the rebound effect and its usefulness was shown by the results of the case study of telework. By using this method, the rebound effect caused by life behavior pattern change of the target group can be estimated without questionnaire or utility function. We intend to extend this method so as to evaluate various situations in the future.

Effizienz und Innovation – Allheilmittel ohne Nebenwirkungen? (Essay) | Efficiency and innovation – panacea with no side effects? (Essay)

Abstract: In this essay, the “efficiency” and “innovation” approaches to the reduction of foreseeable shortages of resources in the timber industry are critically considered. Efficiency gains and the resultant price reductions have led and still lead to an increase in consumption, whereby the savings achieved by the efficient use of resources are reduced (rebound effect) or even completely eaten up (backfire effect). Innovations also often result in increased use, as can be seen in the case of energy consumption. Two alternative conceptual and procedural approaches are presented in contrast to the concepts of efficiency and innovation: the consistency concept requires thought and action in cycles and the use of materials which fit in best with the natural cycles. The sufficiency concept envisages a reduction in the use of resources by means of the frugality of each individual. Humans as consumers are invited to consider critically and honestly their own lifestyle and their role in the current economic system.

Short run scenarios and policies whereby economywide rebound effects might be mitigated

Abstract: During the last years, the so-called Rebound effects that stem from energy efficiency gains have been getting growing interest in the economic literature. This effect occurs when improvements in energy efficiency stimulate energy demand rather than reduce it. All previous analyses have considered efficiency gains as an exogenous costless energy augmenting technological change. In this paper using data on the Spanish economy for 2004 we extent previous research on this field by evaluating and analysing the economy-wide macroeconomic and welfare impacts of mitigating rebound effects under three scenarios, namely, a scenario at which energy productivity gains are compensated with capital productivity losses, a situation whereby it is labour the production factor that compensates energy efficiency improvements and a “policy-mix” that combines improvements in the intermediate use of energy along together with higher energy prices.