IDEAS home Printed from https://ideas.repec.org/p/ulp/sbbeta/2025-12.html

Unraveling the Interplay of Substitution Elasticities and the Green Energy Rebound Effect

Author

Listed:
  • Verónica Acurio Vásconez
  • Mónica Pereira Henriques

Abstract

This paper explores the nuanced interplay between the green energy rebound effect and the elasticity of substitution within a Solow growth model. Our study characterizes how the rebound effect varies with the elasticity of substitution between production factors. Our findings demonstrate that technological progress in green or fossil energy leads to different consumption patterns depending on the elasticity of substitution. For substitution elasticities below one, technological advances result in slower increases in energy consumption relative to labor growth, while for elasticities above one, energy consumption accelerates. These insights underscore the critical role of substitution elasticities in shaping effective energy policies, highlighting opportunities to mitigate the rebound effect and promote sustainable energy transitions.

Suggested Citation

  • Verónica Acurio Vásconez & Mónica Pereira Henriques, 2025. "Unraveling the Interplay of Substitution Elasticities and the Green Energy Rebound Effect," Working Papers of BETA 2025-12, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    • Handle: RePEc:ulp:sbbeta:2025-12
    as

    Download full text from publisher

    File URL: http://beta.u-strasbg.fr/WP/2025/2025-12.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Brookes, Len, 1990. "The greenhouse effect: the fallacies in the energy efficiency solution," Energy Policy, Elsevier, vol. 18(2), pages 199-201, March.
    2. Saunders, Harry D., 2000. "A view from the macro side: rebound, backfire, and Khazzoom-Brookes," Energy Policy, Elsevier, vol. 28(6-7), pages 439-449, June.
    3. Aydın, Erdal & Brounen, Dirk & Ergün, Ahmet, 2023. "The rebound effect of solar panel adoption: Evidence from Dutch households," Energy Economics, Elsevier, vol. 120(C).
    4. J. Daniel Khazzoom, 1980. "Economic Implications of Mandated Efficiency in Standards for Household Appliances," The Energy Journal, , vol. 1(4), pages 21-40, October.
    5. repec:aen:journl:1980v01-04-a02 is not listed on IDEAS
    6. Sampene, Agyemang Kwasi & Li, Cai & Wiredu, John, 2024. "An outlook at the switch to renewable energy in emerging economies: The beneficial effect of technological innovation and green finance," Energy Policy, Elsevier, vol. 187(C).
    7. repec:aen:journl:1992v13-04-a07 is not listed on IDEAS
    8. Harry D. Saunders, 1992. "The Khazzoom-Brookes Postulate and Neoclassical Growth," The Energy Journal, , vol. 13(4), pages 131-148, October.
    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. Font Vivanco, David & Freire-González, Jaume & Kemp, René & van der Voet, Ester, 2014. "The Remarkable Environmental Rebound Effect of Electric Cars: A Microeconomic Approach," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 48(20), pages 12063-12072.
    2. Acurio Vásconez, Verónica & Pereira Henriques, Mónica, 2025. "Unraveling the interplay of substitution elasticities and the green energy rebound effect," Structural Change and Economic Dynamics, Elsevier, vol. 75(C), pages 717-725.
    3. Xu, Mengmeng & Chen, Can & Zhou, Xiaoshi, 2024. "Enhancing understanding of rebound effect: A novel varying coefficient model for China's industrial sector," Energy, Elsevier, vol. 313(C).
    4. 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.
    5. Tan, Ruipeng & Zhang, Zixuan & Du, Kerui & Lin, Boqiang, 2025. "Energy rebound effect in China: Measurement based on a variable coefficient production function," Ecological Economics, Elsevier, vol. 230(C).
    6. Christou, Tryfonas & Lecca, Patrizio & Salotti, Simone, 2025. "Regional rebound effects of energy efficiency improvements in a spatial general equilibrium framework," Energy Economics, Elsevier, vol. 148(C).
    7. Celil Aydin & Ömer Esen & Yağmur Çeti̇ntaş, 2025. "Nexus between environmental innovation and ecological footprint in OECD countries: is there an environmental rebound effect?," Journal of Environmental Studies and Sciences, Springer;Association of Environmental Studies and Sciences, vol. 15(1), pages 113-123, March.
    8. Simon Mathex, 2024. "L'effet de licence comme ressort de l'effet rebond : revue de littérature et pistes de réflexion," Post-Print hal-04619288, HAL.
    9. Alcott, Blake, 2008. "The sufficiency strategy: Would rich-world frugality lower environmental impact," Ecological Economics, Elsevier, vol. 64(4), pages 770-786, February.
    10. Turner, Karen, 2012. "'Rebound' effects from increased energy efficiency: a time to pause and reflect," Stirling Economics Discussion Papers 2012-15, University of Stirling, Division of Economics.
    11. Donglan Zha & Qian Chen & Jaume Freire González, 2023. "The Gap between Expectations and Reality: Assessing the Water Rebound Effect in Chinese Agriculture," Working Papers 1415, Barcelona School of Economics.
    12. Dimitropoulos, John, 2007. "Energy productivity improvements and the rebound effect: An overview of the state of knowledge," Energy Policy, Elsevier, vol. 35(12), pages 6354-6363, December.
    13. Estrella Trincado, 2024. "Physiconomics and a claim for transdisciplinarity in economics," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 11(1), pages 1-7, December.
    14. 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.
    15. 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.
    16. Chang, Juin-Jen & Wang, Wei-Neng & Shieh, Jhy-Yuan, 2018. "Environmental rebounds/backfires: Macroeconomic implications for the promotion of environmentally-friendly products," Journal of Environmental Economics and Management, Elsevier, vol. 88(C), pages 35-68.
    17. Thomas, Brinda A. & Azevedo, Inês L., 2013. "Estimating direct and indirect rebound effects for U.S. households with input–output analysis Part 1: Theoretical framework," Ecological Economics, Elsevier, vol. 86(C), pages 199-210.
    18. Timothy Garrett, 2011. "Are there basic physical constraints on future anthropogenic emissions of carbon dioxide?," Climatic Change, Springer, vol. 104(3), pages 437-455, February.
    19. Severin Borenstein, 2013. "A Microeconomic Framework for Evaluating Energy Efficiency Rebound And Some Implications," NBER Working Papers 19044, National Bureau of Economic Research, Inc.
    20. Barkemeyer, Ralf & Young, C. William & Chintakayala, Phani Kumar & Owen, Anne, 2023. "Eco-labels, conspicuous conservation and moral licensing: An indirect behavioural rebound effect," Ecological Economics, Elsevier, vol. 204(PA).

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:ulp:sbbeta:2025-12. 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: the person in charge The email address of this maintainer does not seem to be valid anymore. Please ask the person in charge to update the entry or send us the correct address (email available below). General contact details of provider: https://edirc.repec.org/data/bestrfr.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.