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Macroeconomic time-series evidence that energy efficiency improvements do not save energy

Author

Listed:
  • Stephan B. Bruns
  • Alessio Moneta
  • David I. Stern

Abstract

The size of the economy-wide rebound effect is crucial for estimating the contribution that energy efficiency improvements can make to reducing energy use and greenhouse gas emissions. We provide the first empirical general equilibrium estimate of the economy-wide rebound effect. We use a structural vector autoregressive (SVAR) model that is estimated using search methods developed in machine learning. We apply the SVAR to U.S. monthly and quarterly data, finding that after four years rebound is around 100%. This implies that policies to encourage cost-reducing energy efficiency innovation are not likely to significantly reduce energy use and greenhouse gas emissions.

Suggested Citation

  • Stephan B. Bruns & Alessio Moneta & David I. Stern, 2019. "Macroeconomic time-series evidence that energy efficiency improvements do not save energy," CAMA Working Papers 2019-21, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:camaaa:2019-21
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    File URL: https://cama.crawford.anu.edu.au/sites/default/files/publication/cama_crawford_anu_edu_au/2019-02/21_2019_bruns_moneta_stern.pdf
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Energy Efficiency Improvements Do Not Save Energy
      by noreply@blogger.com (David Stern) in Stochastic Trend on 2019-02-19 00:58:00

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    Cited by:

    1. Bin Xu, 2022. "How to Efficiently Reduce the Carbon Intensity of the Heavy Industry in China? Using Quantile Regression Approach," IJERPH, MDPI, vol. 19(19), pages 1-24, October.
    2. 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).

    More about this item

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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