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Economy-wide Estimates of Rebound Effects: Evidence from Panel Data

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  • Adetutu, Morakinyo
  • Glass, Anthony
  • Weyman-Jones, Thomas

Abstract

Energy consumption and greenhouse emissions across many countries have increased overtime despite widespread energy efficiency improvements. One explanation offered in the literature is the rebound effect (RE), however there is a debate about the magnitude and appropriate model for estimating RE. Using a combined stochastic frontier analysis and two-stage dynamic panel data approach for 55 countries covering 1980-2010, we explore these two issues of magnitude and model. Our central estimates indicate that, in the short-run, 100% energy efficiency improvement is followed by 90% rebound in energy consumption, but in the long-run it leads to a 36% decrease in energy consumption. Overall, our estimated cross-country RE magnitudes indicate the need to consider or account for RE when energy forecasts and policy measures are derived from potential energy efficiency savings.

Suggested Citation

  • Adetutu, Morakinyo & Glass, Anthony & Weyman-Jones, Thomas, 2015. "Economy-wide Estimates of Rebound Effects: Evidence from Panel Data," MPRA Paper 65409, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:65409
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    1. Third Francqui Lecture
      by noreply@blogger.com (David Stern) in Stochastic Trend on 2021-04-04 21:39:00

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    Cited by:

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    2. Orea, Luis & Álvarez, Inmaculada C. & Wall, Alan, 2021. "Estimating the propagation of the COVID-19 virus with a stochastic frontier approximation of epidemiological models: a panel data econometric model with an application to Spain," Efficiency Series Papers 2021/01, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    3. Xu, Mengmeng & Lin, Boqiang & Wang, Siquan, 2021. "Towards energy conservation by improving energy efficiency? Evidence from China’s metallurgical industry," Energy, Elsevier, vol. 216(C).
    4. Yan, Zheming & Ouyang, Xiaoling & Du, Kerui, 2019. "Economy-wide estimates of energy rebound effect: Evidence from China's provinces," Energy Economics, Elsevier, vol. 83(C), pages 389-401.
    5. Taoyuan Wei & Xue Wang, 2020. "Rebound Effect from Income Savings Due to an Energy Efficiency Improvement by Households: An Input–Output Approach," Energies, MDPI, Open Access Journal, vol. 13(16), pages 1-10, August.
    6. Tajudeen, Ibrahim A. & Wossink, Ada & Banerjee, Prasenjit, 2018. "How significant is energy efficiency to mitigate CO2 emissions? Evidence from OECD countries," Energy Economics, Elsevier, vol. 72(C), pages 200-221.
    7. Li, Jianglong & Liu, Hongxun & Du, Kerui, 2019. "Does market-oriented reform increase energy rebound effect? Evidence from China's regional development," China Economic Review, Elsevier, vol. 56(C), pages 1-1.
    8. Safarzadeh, Soroush & Rasti-Barzoki, Morteza & Hejazi, Seyed Reza, 2020. "A review of optimal energy policy instruments on industrial energy efficiency programs, rebound effects, and government policies," Energy Policy, Elsevier, vol. 139(C).
    9. Stern, David I., 2020. "How large is the economy-wide rebound effect?," Energy Policy, Elsevier, vol. 147(C).
    10. Zhang, Jiangshan & Lin Lawell, C.-Y. Cynthia, 2017. "The macroeconomic rebound effect in China," Energy Economics, Elsevier, vol. 67(C), pages 202-212.
    11. Fei, Rilong & Xie, Mengyuan & Wei, Xin & Ma, Ding, 2021. "Has the water rights system reform restrained the water rebound effect? Empirical analysis from China's agricultural sector," Agricultural Water Management, Elsevier, vol. 246(C).
    12. Spiller, Elisheba & Sopher, Peter & Martin, Nicholas & Mirzatuny, Marita & Zhang, Xinxing, 2017. "The environmental impacts of green technologies in TX," Energy Economics, Elsevier, vol. 68(C), pages 199-214.
    13. Dahlqvist, Anna & Lundgren, Tommy & Marklund, Per-Olov, 2017. "Assessing the Rebound Effect in Energy Intensive Industries: A Factor Demand Model Approach with Asymmetric Price Response," Working Papers 150, National Institute of Economic Research.

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    More about this item

    Keywords

    Energy Efficiency; Input Distance Function; Panel Data; Rebound Effects; Stochastic Frontier Analysis;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D2 - Microeconomics - - Production and Organizations
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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