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Estimating the Rebound Effect of Improving Energy Efficiency
(Gasoline and Electricity): Dynamic General Equilibrium Model
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Pegah Nikbakht *    , Ali Taiebnia , Sajad Barkhordari |
| faculty of economics,University of Tehran , p.nikbakh@yahoo.com |
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Abstract: (1 Views) |
| Improving energy efficiency through reducing production costs leads to an increase in demand. This increase leads to a phenomenon called the feedback effect, meaning that part of the energy that was supposed to be saved is consumed in the form of increased demand. In this paper, using a dynamic computable general equilibrium model and the 2016 social accounting matrix, the rebound effect of improving energy consumption efficiency (gasoline and electricity) and its effects on 10 economic sectors have been examined. The results of the model indicate that after improving efficiency by 10% in gasoline and electricity, although demand for them decreased, the extent of this decrease was not proportional to predictions. Also, improving efficiency by 10% in a dynamic general equilibrium model had a rebound effect in all sectors under study and failed to lead to a reduction in consumption. Meanwhile, the rebound effect in the road transportation sector was greater than in other sectors. Therefore, to save energy in this sector, one cannot rely solely on “improving efficiency”; policymakers need to also use complementary policies such as price reform. Given the importance of the concept of feedback loop, complementary policies such as price reform, infrastructure investment, consumption pattern reform, education and awareness policies are essential to reduce it and increase real efficiency. |
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| Keywords: Dynamic Computable General Equilibrium, Feedback Loop, Energy Efficiency |
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Full-Text [PDF 713 kb]
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Type of Study: Applicable |
Subject:
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