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Does product lifetime extension increase our income at the expense of energy consumption?

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  • Kagawa, Shigemi
  • Nansai, Keisuke
  • Kudoh, Yuki

Abstract

The present paper contributes to modeling a simple social accounting method with cumulative product lifetime distributions and argues how product lifetime extension affects income flow throughout the entire economic system. Empirical analysis focusing on automobile use (ordinary passenger vehicle, small passenger vehicle, and light passenger vehicle) in Japan revealed that if all of the additional income gain from product lifetime extension flows into the investment sector, a one-year lifetime extension during the ten years of the study period (1990–2000) would have led to an increase in income in 2000 amounting to +7 billion yen, as well as contributing to savings in energy amounting to −4×106 GJ. That is, longer-term passenger vehicle use increases income and decreases energy consumption under special cases. We also found that in the general case when less than 93% of additional income resulting from vehicle lifetime extension is directed to the investment sector, a +1 year automobile lifetime extension increases income at the expense of energy consumption.

Suggested Citation

  • Kagawa, Shigemi & Nansai, Keisuke & Kudoh, Yuki, 2009. "Does product lifetime extension increase our income at the expense of energy consumption?," Energy Economics, Elsevier, vol. 31(2), pages 197-210.
  • Handle: RePEc:eee:eneeco:v:31:y:2009:i:2:p:197-210
    DOI: 10.1016/j.eneco.2008.08.011
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    References listed on IDEAS

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    Cited by:

    1. Nishijima, Daisuke, 2017. "The role of technology, product lifetime, and energy efficiency in climate mitigation: A case study of air conditioners in Japan," Energy Policy, Elsevier, vol. 104(C), pages 340-347.
    2. Gabriel-Buenaventura, Alejandro & Azzopardi, Brian, 2015. "Energy recovery systems for retrofitting in internal combustion engine vehicles: A review of techniques," Renewable and Sustainable Energy Reviews, Elsevier, vol. 41(C), pages 955-964.

    More about this item

    Keywords

    Social accounting; Energy accounting; Income flow; Passenger vehicle use; Gasoline consumption; Passenger vehicle lifetime; Fuel economy; Macro rebound effect;

    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts

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