The phenomenon of rebound effects has sparked considerable academic, policy and press debate over the effectiveness of energy efficiency policy in recent years. There has been a huge surge in empirical studies claiming rebound effects of hugely varying magnitudes. The contention of this paper is that the lack of consensus in the literature is grounded in a rush to empirical estimation in the absence of solid analytical foundations. Focus on measuring a single 'rebound' measure has led to a neglect of detail on precisely what type of change in energy use is considered in any one study and on the range of mechanisms governing the economy-wide response. This paper attempts to bring a reflective pause to the development of the rebound literature, with a view to identifying the key issues that policymakers need to understand and analysts need to focus their attention on.

We estimate and compare two empirical measures of the weak sustainability of an economy for the first time: the change in augmented Green Net National Product (GNNP), and the interest on augmented Genuine Savings (GS). Yearly calculations are given for each measure for Scotland during 1992-1999. Augmentation means including, using projections to 2020, changed production possibilities enabled by exogenous technical progress or changing oil prices. The change in augmented GNNP and the interest on augmented GS are both always positive, showing no sustainability problem for Scotland then, according to the assumptions underlying our weak sustainability calculations. However, the former greatly exceeds the latter, even when macroeconomic fluctuations are taken into account. This is a mismatch which poses an unresolved problem with the theory. Resolving it may require respecifying the utility functions used in mainstream growth theory

In this paper we use an energy-economy-environment computable general equilibrium (CGE) model of the Scottish economy to examine the impacts of an exogenous increase in energy augmenting technological progress in the domestic commercial Transport sector on the supply and use of energy.We focus our analysis on Scottish refined oil, as the main type of energy input used in commercial transport activity. We find that a 5% increase in energy efficiency in the commercial Transport sector leads to rebound effects in the use of oil-based energy commodities in all time periods, in the target sector and at the economy-wide level. However, our results also suggest that such an efficiency improvement may cause a contraction in capacity in the Scottish oil supply sector. This "disinvestment effect" acts as a constraint on the size of rebound effects. However, the magnitude of rebound effects and presence of the disinvestment effect in the simulations conducted here are sensitive to the specification of key elasticities of substitution in the nested production function for the target sector, particularly the substitutability of energy for non-energy intermediate inputs to production.

In 2021, the UK Government commenced a ‘cluster sequencing’ initiative to identify early movers in delivering carbon transport and storage (T&S) services to proximate regional industry clusters with capture potential. A Scottish proposition focussed primarily on linking the Grangemouth industry cluster to North Sea storage, and the potential to transition Oil and Gas industry capacity to deliver CO2 T&S has devolved policy support. This is in terms of potential to transition and create new direct industry and supply chain jobs, set against risks of displacing jobs in different sectors and regions of the UK. We introduce a Scottish CO2 T&S industry to a UK multi-sector economy-wide model, assessing the extent of potential expansion and job creation in the presence of supply-side and funding constraints. We find that large employment ‘multiplier’ gains registered in previous studies only apply over the very long term and in the absence of such constraints. Crucially, any need to recover demands on the public purse via socialisation of costs severely constrains possible gains, while imposing ‘polluter pays’ leads to net economy-wide contractions triggered by competitiveness losses concentrated in Scottish cluster industries, leading to offshoring of production and jobs, potentially skewed within the localities hosting the clusters.

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