IDEAS home Printed from https://ideas.repec.org/a/zbw/espost/314438.html
   My bibliography  Save this article

Energy taxation policies can counteract the rebound effect: analysis within a general equilibrium framework

Author

Listed:
  • Freire-González, Jaume

Abstract

The rebound effect reflects the difference between the expected energy savings from energy efficiency, and the real ones, considering the former is higher than the latter. In some extreme cases, some scholars consider energy use can even increase after an energy efficiency improvement. This is due to agents’ behavioural responses. After almost four decades of theoretical and empirical studies in the field, there is a strong consensus amongst energy economists that the rebound effect of energy efficiency exists, although its importance is still being discussed. However, there are few empirical studies exploring its potential solutions. In this research we empirically assess the effects of energy taxation on the rebound effect. Using a dynamic energy-economy computable general equilibrium (CGE) model of the Spanish economy, we test a global energy efficiency increase of 5.00%, and at the same time, different ad valorem tax rates on energy industries. We find that a tax rate of 3.76% would totally counteract the economy-wide rebound effect of 82.82% we estimate for the Spanish economy. This tax rate would still allow some economic benefits provided by the increase of energy productivity.

Suggested Citation

  • Freire-González, Jaume, 2019. "Energy taxation policies can counteract the rebound effect: analysis within a general equilibrium framework," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 13(1), pages 69-78.
    • Handle: RePEc:zbw:espost:314438
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/314438/1/Taxes%20RE%20%20Postprint.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Amory B. Lovins, 1988. "Energy Saving from the Adoption of More Efficient Appliances: Another View," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 155-170.
    2. Jaume Freire-Gonz lez & Ignasi Puig-Ventosa, 2015. "Energy Efficiency Policies and the Jevons Paradox," International Journal of Energy Economics and Policy, Econjournals, vol. 5(1), pages 69-79.
    3. Broberg, Thomas & Berg, Charlotte & Samakovlis, Eva, 2015. "The economy-wide rebound effect from improved energy efficiency in Swedish industries–A general equilibrium analysis," Energy Policy, Elsevier, vol. 83(C), pages 26-37.
    4. Jaume Freire-González & Mun S. Ho, 2018. "Environmental Fiscal Reform and the Double Dividend: Evidence from a Dynamic General Equilibrium Model," Sustainability, MDPI, vol. 10(2), pages 1-18, February.
    5. Arnold Tukker & Arjan de Koning & Richard Wood & Troy Hawkins & Stephan Lutter & Jose Acosta & Jose M. Rueda Cantuche & Maaike Bouwmeester & Jan Oosterhaven & Thomas Drosdowski & Jeroen Kuenen, 2013. "Exiopol - Development And Illustrative Analyses Of A Detailed Global Mr Ee Sut/Iot," Economic Systems Research, Taylor & Francis Journals, vol. 25(1), pages 50-70, March.
    6. Amory B. Lovins, 1988. "Energy Saving Resulting from the Adoption of More Efficient Appliances: Another View," The Energy Journal, , vol. 9(2), pages 155-162, April.
    7. Louis-Gaëtan Giraudet & Philippe Quirion, 2008. "Efficiency and distributional impacts of tradable white certificates compared to taxes, subsidies and regulations," Revue d'économie politique, Dalloz, vol. 118(6), pages 885-914.
    8. Saunders, Harry D., 2013. "Historical evidence for energy efficiency rebound in 30 US sectors and a toolkit for rebound analysts," Technological Forecasting and Social Change, Elsevier, vol. 80(7), pages 1317-1330.
    9. John Henly & Henry Ruderman & Mark D. Levine, 1988. "Energy Saving Resulting from the Adoption of More Efficient Appliances: A Follow-up," The Energy Journal, , vol. 9(2), pages 163-170, April.
    10. Grepperud, Sverre & Rasmussen, Ingeborg, 2004. "A general equilibrium assessment of rebound effects," Energy Economics, Elsevier, vol. 26(2), pages 261-282, March.
    11. Font Vivanco, David & Kemp, René & van der Voet, Ester, 2016. "How to deal with the rebound effect? A policy-oriented approach," Energy Policy, Elsevier, vol. 94(C), pages 114-125.
    12. Freire-González, Jaume, 2011. "Methods to empirically estimate direct and indirect rebound effect of energy-saving technological changes in households," Ecological Modelling, Elsevier, vol. 223(1), pages 32-40.
    13. Freire-González, Jaume, 2017. "A new way to estimate the direct and indirect rebound effect and other rebound indicators," Energy, Elsevier, vol. 128(C), pages 394-402.
    14. Freire González, Jaume, 2010. "Empirical evidence of direct rebound effect in Catalonia," Energy Policy, Elsevier, vol. 38(5), pages 2309-2314, May.
    15. Allan, Grant & Hanley, Nick & McGregor, Peter & Swales, Kim & Turner, Karen, 2007. "The impact of increased efficiency in the industrial use of energy: A computable general equilibrium analysis for the United Kingdom," Energy Economics, Elsevier, vol. 29(4), pages 779-798, July.
    16. Jaume Freire-González & Mun S. Ho, 2019. "Carbon taxes and the double dividend hypothesis in a recursive-dynamic CGE model for Spain," Economic Systems Research, Taylor & Francis Journals, vol. 31(2), pages 267-284, April.
    17. J. Daniel Khazzoom, 1980. "Economic Implications of Mandated Efficiency in Standards for Household Appliances," The Energy Journal, , vol. 1(4), pages 21-40, October.
    18. J. Daniel Khazzoom, 1980. "Economic Implications of Mandated Efficiency in Standards for Household Appliances," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 21-40.
    19. Ruzzenenti, F. & Basosi, R., 2008. "The rebound effect: An evolutionary perspective," Ecological Economics, Elsevier, vol. 67(4), pages 526-537, November.
    20. Turner, Karen, 2008. "A computable general equilibrium analysis of the relative price sensitivity required to induce rebound effects in response to an improvement in energy efficiency in the UK economy," SIRE Discussion Papers 2008-20, Scottish Institute for Research in Economics (SIRE).
    21. Font Vivanco, David & McDowall, Will & Freire-González, Jaume & Kemp, René & van der Voet, Ester, 2016. "The foundations of the environmental rebound effect and its contribution towards a general framework," Ecological Economics, Elsevier, vol. 125(C), pages 60-69.
    22. Sorrell, Steve & Dimitropoulos, John & Sommerville, Matt, 2009. "Empirical estimates of the direct rebound effect: A review," Energy Policy, Elsevier, vol. 37(4), pages 1356-1371, April.
    23. Freire-González, Jaume, 2018. "Environmental taxation and the double dividend hypothesis in CGE modelling literature: A critical review," Journal of Policy Modeling, Elsevier, vol. 40(1), pages 194-223.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Freire-González, Jaume, 2017. "Evidence of direct and indirect rebound effect in households in EU-27 countries," Energy Policy, Elsevier, vol. 102(C), pages 270-276.
    2. Freire-González, Jaume & Ho, Mun S., 2022. "Policy strategies to tackle rebound effects: A comparative analysis," Ecological Economics, Elsevier, vol. 193(C).
    3. Jaume Freire-González, 2019. "Does Water Efficiency Reduce Water Consumption? The Economy-Wide Water Rebound Effect," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 33(6), pages 2191-2202, April.
    4. Freire-González, Jaume, 2017. "A new way to estimate the direct and indirect rebound effect and other rebound indicators," Energy, Elsevier, vol. 128(C), pages 394-402.
    5. Wen, Fenghua & Ye, Zhengke & Yang, Huaidong & Li, Ke, 2018. "Exploring the rebound effect from the perspective of household: An analysis of China's provincial level," Energy Economics, Elsevier, vol. 75(C), pages 345-356.
    6. David Font Vivanco & Serenella Sala & Will McDowall, 2018. "Roadmap to Rebound: How to Address Rebound Effects from Resource Efficiency Policy," Sustainability, MDPI, vol. 10(6), pages 1-17, June.
    7. Cansino, José M. & Román-Collado, Rocío & Merchán, José, 2019. "Do Spanish energy efficiency actions trigger JEVON’S paradox?," Energy, Elsevier, vol. 181(C), pages 760-770.
    8. Ahmann, Lara & Banning, Maximilian & Lutz, Christian, 2022. "Modeling rebound effects and counteracting policies for German industries," Ecological Economics, Elsevier, vol. 197(C).
    9. David Font Vivanco & Jaume Freire‐González & Ray Galvin & Tilman Santarius & Hans Jakob Walnum & Tamar Makov & Serenella Sala, 2022. "Rebound effect and sustainability science: A review," Journal of Industrial Ecology, Yale University, vol. 26(4), pages 1543-1563, August.
    10. Font Vivanco, David & Nechifor, Victor & Freire-González, Jaume & Calzadilla, Alvaro, 2021. "Economy-wide rebound makes UK’s electric car subsidy fall short of expectations," Applied Energy, Elsevier, vol. 297(C).
    11. Rocha, Felipe Freitas da & Almeida, Edmar Luiz Fagundes de, 2021. "A general equilibrium model of macroeconomic rebound effect: A broader view," Energy Economics, Elsevier, vol. 98(C).
    12. Freire-González, Jaume & Ho, Mun S., 2021. "Voluntary actions in households and climate change mitigation," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 321.
    13. Amjadi, Golnaz & Lundgren, Tommy & Persson, Lars, 2018. "The Rebound Effect in Swedish Heavy Industry," Energy Economics, Elsevier, vol. 71(C), pages 140-148.
    14. Freire-González, Jaume & Font Vivanco, David, 2017. "The influence of energy efficiency on other natural resources use: An input-output perspective," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 162, pages 336-345.
    15. Freire-González, Jaume & Font Vivanco, David & Puig-Ventosa, Ignasi, 2017. "Economic structure and energy savings from energy efficiency in households," Ecological Economics, Elsevier, vol. 131(C), pages 12-20.
    16. Tufan Özsoy, 2024. "The “energy rebound effect” within the framework of environmental sustainability," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 13(2), March.
    17. Brockway, Paul E. & Sorrell, Steve & Semieniuk, Gregor & Heun, Matthew Kuperus & Court, Victor, 2021. "Energy efficiency and economy-wide rebound effects: A review of the evidence and its implications," Renewable and Sustainable Energy Reviews, Elsevier, vol. 141(C).
    18. Kulmer, Veronika & Seebauer, Sebastian, 2019. "How robust are estimates of the rebound effect of energy efficiency improvements? A sensitivity analysis of consumer heterogeneity and elasticities," Energy Policy, Elsevier, vol. 132(C), pages 1-14.
    19. Jafari, Mahboubeh & Stern, David I. & Bruns, Stephan B., 2022. "How large is the economy-wide rebound effect in middle income countries? Evidence from Iran," Ecological Economics, Elsevier, vol. 193(C).
    20. Sondes Kahouli & Xavier Pautrel, 2020. "Residential and Industrial Energy Efficiency Improvement: A Dynamic General Equilibrium Analysis of the Rebound Effect," Working Papers 2020.28, Fondazione Eni Enrico Mattei.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:espost:314438. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/zbwkide.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.