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Modeling rebound effects and counteracting policies for German industries

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  • Ahmann, Lara
  • Banning, Maximilian
  • Lutz, Christian

Abstract

Energy efficiency programs for industry are important to reduce energy demand and GHG emissions. Rebound effects reduce intended energy savings. Against this background, various policy measures are modeled and combined for German industry to see how they can counter rebound effects. The efficiency program itself, the reinvestment requirement and carbon prices reduce energy use in industry. Higher carbon prices or energy taxes also reduce energy consumption and emissions in other sectors that are more price sensitive. Reimbursement of carbon pricing revenues via lower electricity prices can incentivize the shift towards electricity, but also towards more energy consumption. A combined set of policy measures for German industry can reduce energy use in industry by 5.2% against a baseline in 2030. The combined policy set will further reduce CO2 emissions, having only small effects on other sustainability indicators such as GDP and employment. In the future, rebound effects need to be considered in policy design. As the combined set will clearly miss the new national emission target for 2030, additional measures are needed together with a fundamental transformation of the energy system. To reach the targets of the Paris agreement, besides energy efficiency also clean energy supply, sufficiency and behavioral change are necessary.

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  • Ahmann, Lara & Banning, Maximilian & Lutz, Christian, 2022. "Modeling rebound effects and counteracting policies for German industries," Ecological Economics, Elsevier, vol. 197(C).
    • Handle: RePEc:eee:ecolec:v:197:y:2022:i:c:s0921800922000945
    DOI: 10.1016/j.ecolecon.2022.107432
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