Rethinking economy-wide rebound measures: An unbiased proposal

Abstract

In spite of having been first introduced in the last half of the ninetieth century, the debate about the possible rebound effects from energy efficiency improvements is still an open question in the economic literature. This paper contributes to the existing research on this issue proposing an unbiased measure for economy-wide rebound effects. The novelty of this economy-wide rebound measure stems from the fact that not only actual energy savings but also potential energy savings are quantified under general equilibrium conditions. Our findings indicate that the use of engineering savings instead of general equilibrium potential savings downward biases economy-wide rebound effects and upward-biases backfire effects. The discrepancies between the traditional indicator and our proposed measure are analysed in the context of the Spanish economy.

Economy-wide rebound effects for non-energetic raw materials

“…Useful overviews of the rebound effect can be found in Maxwell andMcAndrew (2011), UKERC (2007) and Dimitropoulos (2007). The majority of the empirical literature, including recent publications, has analyzed rebound effects of energy efficiency measures (de Haan et al, 2007;Dimitropoulos, 2007;Sorrell, 2009;Sorrell and Dimitropoulos, 2008;Saunders, 2000Saunders, , 2013Turner, 2009;Thomas and Azevedo, 2013a,b;Guerra and Sancho, 2010;Borenstein, 2013). Only few studies have so far analyzed such effects for resources other than energy (Saunders, 2014;Meyer et al, 2007;Meyer et al, 2012;Takase et al, 2005;Kok et al, 2006), while only Saunders (2014) has highlighted the importance of giving raw materials a more prominent role in rebound analysis and laid some theoretical foundations of raw material rebound effects.…”

After 35 Years of Rebound Research in Economics: Where Do We Stand?

“…They argue that this should be considered as part of the potential energy saving (PES) in the denominator of the conventional rebound (R) calculation (where R=[1-AES/PES]x100, with AES being actual energy savings). Turner (2013) disputes this, arguing that, since indirect savings in energy supply chain activity will not be known ex ante (unless policy analysts have access to appropriate fixed price input-output models), practical considerations and the understanding of policymakers should overrule the strict general equilibrium conditions that Guerra and Sancho (2010) propose. The Turner argument is that the PES in the denominator of the economic rebound calculation should be restricted to projected engineering savings (that is, proportionate to the extent of the efficiency improvement), with all other changes in energy use (positive and negative) that occur as a result of economic responses included only in the actual energy savings in the numerator.…”

“Rebound” Effects from Increased Energy Efficiency: A Time to Pause and Reflect

“…Thus the Turner vs. Guerra and Sancho argument centres on whether potential energy savings should be limited to the anticipated or engineering savings that equate to the size of the efficiency improvement. This author's contention is that, since indirect energy savings will not be known ex ante (unless policy analysts have access to appropriate IO models), practical considerations and the understanding of policymakers should overrule the strict general equilibrium conditions that Guerra and Sancho (2010) introduce. Again, one becomes concerned that definition and measurement of a single 'rebound' measure has begun to override understanding of the range of economy-wide responses that may occur and the fact that different mechanisms may exert upward or downward pressure on macro-level energy use.…”