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Regional energy rebound effect: The impact of economy-wide and sector level energy efficiency improvement in Georgia, USA

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  • Yu, Xuewei
  • Moreno-Cruz, Juan
  • Crittenden, John C.

Abstract

Rebound effect is defined as the lost part of ceteris paribus energy savings from improvements on energy efficiency. In this paper, we investigate economy-wide energy rebound effects by developing a computable general equilibrium (CGE) model for Georgia, USA. The model adopts a highly disaggregated sector profile and highlights the substitution possibilities between different energy sources in the production structure. These two features allow us to better characterize the change in energy use in face of an efficiency shock, and to explore in detail how a sector-level shock propagates throughout the economic structure to generate aggregate impacts. We find that with economy-wide energy efficiency improvement on the production side, economy-wide rebound is moderate. Energy price levels fall very slightly, yet sectors respond to these changing prices quite differently in terms of local production and demand. Energy efficiency improvements in particular sectors (epicenters) induce quite different economy-wide impacts. In general, we expect large rebound if the epicenter sector is an energy production sector, a direct upstream/downstream sector of energy production sectors, a transportation sector or a sector with high production elasticity. Our analysis offers valuable insights for policy makers aiming to achieve energy conservation through increasing energy efficiency.

Suggested Citation

  • Yu, Xuewei & Moreno-Cruz, Juan & Crittenden, John C., 2015. "Regional energy rebound effect: The impact of economy-wide and sector level energy efficiency improvement in Georgia, USA," Energy Policy, Elsevier, vol. 87(C), pages 250-259.
  • Handle: RePEc:eee:enepol:v:87:y:2015:i:c:p:250-259
    DOI: 10.1016/j.enpol.2015.09.020
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Jiang Zhu & Zhenyu Zhao, 2017. "Chinese Electric Power Development Coordination Analysis on Resource, Production and Consumption: A Provincial Case Study," Sustainability, MDPI, Open Access Journal, vol. 9(2), pages 1-19, February.
    2. repec:eee:appene:v:221:y:2018:i:c:p:280-298 is not listed on IDEAS
    3. Li, Ke & Jiang, Zhujun, 2016. "The impacts of removing energy subsidies on economy-wide rebound effects in China: An input-output analysis," Energy Policy, Elsevier, vol. 98(C), pages 62-72.
    4. repec:eee:enepol:v:106:y:2017:i:c:p:315-325 is not listed on IDEAS
    5. repec:eee:energy:v:145:y:2018:i:c:p:408-416 is not listed on IDEAS
    6. Gioele Figus & J Kim Swales & Karen Turner, 2017. "Can a reduction in fuel use result from an endogenous technical progress in motor vehicles? A partial and general equilibrium analysis," Working Papers 1705, University of Strathclyde Business School, Department of Economics.
    7. Gioele Figus & Patrizio Lecca & Peter McGregor & Karen Turner, 2017. "Energy efficiency as an instrument of regional development policy? Trading-off the benefits of an economic stimulus and energy rebound effects," Working Papers 1702, University of Strathclyde Business School, Department of Economics.
    8. Jinpeng Liu & Li Wang & Mohan Qiu & Jiang Zhu, 2016. "Promotion Potentiality and Optimal Strategies Analysis of Provincial Energy Efficiency in China," Sustainability, MDPI, Open Access Journal, vol. 8(8), pages 1-17, August.

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