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Efficiency, effectiveness and implementation feasibility of energy efficiency rebates: The “Renove” plan in Spain

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  • Galarraga, Ibon
  • Abadie, Luis M.
  • Ansuategi, Alberto

Abstract

State-sponsored incentive policies frequently include subsidies or rebates for the purchase of more efficient appliances. However, more research is required into the effects of this tool in isolation. A case in point is the so-called “Renove” plan in Spain. First, the inefficiency losses (dead-weight losses) associated with energy efficiency rebates must be taken into account. Such a policy may also encourage the large-scale purchasing of energy-efficient appliances, which may finally result in an increase in electricity consumption (rebound effect). Furthermore, although a subsidy is more widely accepted than other tools from social and political viewpoints, especially than taxes, the fiscal consolidation challenge faced by many countries reduces the scope for environmental policy measures on the expenditure side of the budget and strengthens the need to use taxes to meet the agreed policy objectives. This paper shows that the current application of the Spanish “Renove” plan with rebates on the dishwasher market for energy efficient appliances generates some welfare losses, a rebound effect and a considerable deficit in public budgets. The paper examines and assesses the effect of different combinations of taxes and rebates in the case of dishwashers in Spain based on their performance in terms of economic efficiency, environmental effectiveness and implementation feasibility.

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  • Galarraga, Ibon & Abadie, Luis M. & Ansuategi, Alberto, 2013. "Efficiency, effectiveness and implementation feasibility of energy efficiency rebates: The “Renove” plan in Spain," Energy Economics, Elsevier, vol. 40(S1), pages 98-107.
  • Handle: RePEc:eee:eneeco:v:40:y:2013:i:s1:p:s98-s107
    DOI: 10.1016/j.eneco.2013.09.012
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    8. Spandagos, Constantine & Baark, Erik & Ng, Tze Ling & Yarime, Masaru, 2021. "Social influence and economic intervention policies to save energy at home: Critical questions for the new decade and evidence from air-condition use," Renewable and Sustainable Energy Reviews, Elsevier, vol. 143(C).
    9. Ibon Galarraga & Luis M. Abadie, 2014. "The use of “Bonus-Malus†schemes for promoting energy-efficient household appliances: a case study for Spain," Working Papers 2014-06, BC3.
    10. Olsthoorn, Mark & Schleich, Joachim & Gassmann, Xavier & Faure, Corinne, 2017. "Free riding and rebates for residential energy efficiency upgrades: A multi-country contingent valuation experiment," Energy Economics, Elsevier, vol. 68(S1), pages 33-44.
    11. Guo, Fei & Pachauri, Shonali & Cofala, Janusz, 2017. "Cost-effective subsidy incentives for room air conditioners in China: An analysis based on a McFadden-type discrete choice model," Energy Policy, Elsevier, vol. 110(C), pages 375-385.
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    Keywords

    Energy efficiency; Spain; Rebates; Appliances; Rebound effect;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C20 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - General

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