The macroeconomic rebound effect in China

The rebound effect measures the fraction of an energy efficiency improvement that is offset by increased energy consumption. A rebound effect can arise at both the microeconomic level and the macroeconomic level. The macroeconomic rebound effect measures the effect of an increase in energy efficiency on overall energy demand after markets adjust and re-equilibrate. At the macroeconomic level, energy efficiency gains can increase energy consumption through two channels: the macroeconomic price effect and the macroeconomic growth effect. In this paper, we econometrically estimate the macroeconomic energy rebound effect in China. Our results show that there is a statistically significant macroeconomic price rebound effect for China, for each province, and for the short run, intermediate run, and the long run. We also find some evidence of a macroeconomic growth rebound in the short run and the intermediate run for some years either nation-wide or for some provinces in China; moreover, for some years and some provinces, we cannot reject backfire. The rebound effect is an important phenomenon that the government of China should not neglect when making energy policy, as it affects how improvements in energy efficiency translate into changes in energy consumption.     

Rebound effect of improved energy efficiency for different energy types: A general equilibrium analysis for China

This paper explores the rebound effect of different energy types in China based on a static computable general equilibrium model. A one-off 5% energy efficiency improvement is imposed on five different types of energy, respectively, in all the 135 production sectors in China. The rebound effect is measured both on the production level and on the economy-wide level for each type of energy. The results show that improving energy efficiency of using electricity has the largest positive impact on GDP among the five energy types. Inter-fuel substitutability does not affect the macroeconomic results significantly, but long-run impact is usually greater than the short-run impact. For the exports-oriented sectors, those that are capital-intensive get big negative shock in the short run while those that are labour-intensive get hurt in the long run. There is no “backfire” effect; however, improving efficiency of using electricity can cause negative rebound, which implies that improving the energy efficiency of using electricity might be a good policy choice under China's current energy structure. In general, macro-level rebound is larger than production-level rebound. Primary energy goods show larger rebound effect than secondary energy goods. In addition, the paper points out that the policy makers in China should look at the rebound effect in the long term rather than in the short term. The energy efficiency policy would be a good and effective policy choice for energy conservation in China when it still has small inter-fuel substitution.     

The effect of energy end-use efficiency improvement on China’s energy use and CO2 emissions: a CGE model-based analysis

With its rapid economic growth, China is now confronted with soaring pressure from both its energy supply and the environment. To deal with this conflict, energy end-use efficiency improvement is now promoted by the government as an emphasis for future energy saving. This study explores the general equilibrium effect of energy end-use efficiency improvement on China’s economy, energy use, and CO₂ emissions. This paper develops a static, multisector computable general equilibrium model (CGE) for China, with specific detail in energy use and with the embodiment of energy efficiency. In order to explore the ability of subsidizing non-fossil-generated electricity on moderating potential rebound effects, in this model, the electricity sector was deconstructed into five specific generation activities using bottom–up data from the Chinese electricity industry. The model is calibrated into a 16-sector Chinese Social Accounting Matrix for the year 2002. In the analysis, seven scenarios were established: business as usual, solely efficiency improvement, and five policy scenarios (taxing carbon, subsidized hydropower, subsidized nuclear power, combination of taxing carbon and subsidized hydropower, combination of taxing carbon and subsidized nuclear power). Results show that a sectoral-uniform improvement of energy end-use efficiency will increase rather than decrease the total energy consumption and CO₂ emissions. The sensitivity analysis of sectoral efficiency improvement shows that efficiency improvements happened in different sectors may have obvious different extents of rebound. The three sectors, whose efficient improvements do not drive-up total national energy use and CO₂ emissions, include Iron and Steel, Building Materials, and Construction. Thus, the improvement of energy end-use efficiency should be sectoral specific. When differentiating the sectoral energy-saving goal, not only the saving potential of each sector but also its potential to ease the total rebound should be taken into account. Moreover, since the potential efficiency improvement for a sector over a certain period will be limited, technology measures should work along with a specific policy to neutralize the rebound effect. Results of policy analysis show that one relatively enhanced way is to combine carbon taxing with subsidized hydropower.     

Estimation of global rebound effect caused by energy efficiency improvement

Rebound effect refers to the phenomenon that the actual reduction in energy use and emissions is less than the expected reduction caused by an energy efficiency improvement due to induced behavior adjustment of relevant economic agents. This article studies the global rebound effects on energy use and related emissions caused by an energy efficiency improvement. We adopt a global computable general equilibrium (CGE) model to design a scenario of energy efficiency improvement, which is compared to a business-as-usual (BAU) scenario to identify the global rebound effect. Our results show very large rebound effect on energy use (70%) and related emissions (90%) in 2040 at the global level with regional and sectoral differences. Important determinants, among others, are induced labor movement among economic activities and labor supply, and substitution elasticity between energy and other goods. Labor mobility has a marked impact on both rebound effects and on fuel mix. The global rebound effect is still considerable even with a low substitution elasticity between energy and other goods. The effect of capital accumulation over time contributes marginally to the global rebound effect as it is utilized to promote economic growth by using energy input more efficiently.     

Empirical evidence of direct rebound effect in Indian two-wheeler sector

The transport sector is the main contributor to the greenhouse gas emissions in India. The rise in atmospheric pollution due to greenhouse gases has triggered the energy efficiency improvement policy in the Indian automotive sector. The extent of success of the energy efficiency improvement policy in any sector is substantially influenced by the phenomenon of “rebound effect”. The present study is aimed at seeking for the existence of direct rebound effect and its stability over time in two-wheeler transport sector in India using aggregate time series data. The study found out the presence of this effect in the two-wheeler sector, and it experiences a partial rebound of 25.5%. The direct rebound effect was found to be declining over time which is in line with the Greene (Energy Policy, 41, 14–28, 2012) and Small and Van Dender ( Energy Journal, 28(1), 25–51, 2007) models. The rebound effect existence in the two-wheeler sector should be considered during the development and implementation of energy efficiency related policies in the Indian transport sector in order to reap the maximum benefits out of these policies in the future.     

Why is South Korea's renewable energy policy failing? A qualitative evaluation

This study explores the causes of the South Korean government's failure to successfully deploy its renewable energy policy. Despite the South Korean government’s ongoing efforts since 2002 to promote the deployment of renewable energy, the established deployment target has not been met and the share of renewable energy supply in total primary energy supply is poor compared to peer countries with a similar level of economic development. Therefore, we attempt to find the causes of this policy failure using qualitative evaluation methods. Through the analyses, conducted using focused interviews and secondary data, we found that the domination of the fossil fuel and nuclear power industry's interests, inconsistent policy shifts, policy design that lacks sufficient support schemes, poorly coordinated government activities, and unsystemic and untimely monitoring and feedback have led to the failure of renewable energy deployment policies in South Korea. To overcome these problems, we suggest that the South Korean government should set more ambitious policy goals, establish a new independent organization that focuses on energy policy issues, use a varied policy mix, and secure political support from diverse policy actors.     

Reform of refined oil product pricing mechanism and energy rebound effect for passenger transportation in China

Improving energy efficiency is the primary method adopted by the Chinese government in an effort to achieve energy conservation target in the transport sector. However, the offsetting effect of energy rebound would greatly reduce its real energy-saving potentials. We set up a Linear Approximation of the Almost Ideal Demand System Model (LA-AIDS model) to estimate the rebound effect for passenger transportation in China. Real energy conservation effect of improving energy efficiency can also be obtained in the process. The result shows that the rebound effect is approximately 107.2%. This figure signifies the existence of ‘backfire effect’, indicating that efficiency improvement in practice does not always lead to energy-saving. We conclude that one important factor leading to the rebound effect, is the refined oil pricing mechanism. China's refined oil pricing mechanism has been subjected to criticism in recent years. The results of simulation analysis show that the rebound could be reduced to approximately 90.7% if the refined oil pricing mechanism is reformed. In this regard, we suggest further reforms in the current refined oil pricing mechanism.     

Empirical evidence of direct rebound effect in Catalonia

This paper reviews the empirical literature concerning the direct rebound effect in households; it briefly analyzes the main theoretical and methodological aspects, and finally estimates the magnitude of direct rebound effect for all energy services using electricity in households of Catalonia (Spain) using econometric techniques. The main results show an estimated direct rebound effect of 35% in the short term and 49% in the long term. The existence of a rebound effect reduces the effectiveness of energy efficiency policies.     

Energy productivity improvements and the rebound effect: An overview of the state of knowledge

The ‘rebound effect’ from more efficient use of energy has been well investigated, with plenty of evidence suggesting that the ‘direct’ rebound effect is relatively small for most energy services—typically less than 30%. However, the same conclusion may not apply to ‘indirect’ and ‘economy-wide’ rebound effects. Here, several authors suggest that improved energy efficiency may increase energy consumption in the medium to long term, a view that undermines the rationale for energy efficiency as an instrument of climate-related energy policy and has been ardently debated. One of the main reasons behind the debate is the lack of a rigorous theoretical framework that can describe the mechanisms and consequences of the rebound effect at the macro-economic level. Proponents of the rebound effect point to ‘suggestive’ evidence from a variety of areas including economic history, econometric measurements of productivity and macro-economic modelling. This evidence base is relatively small, highly technical, lacks transparency, rests upon contested theoretical assumptions and is inconclusive. This paper provides an accessible summary of the state of knowledge on this issue and shows how separate areas of research can provide relevant insights: namely neoclassical models of economic growth, computable general equilibrium (CGE) modelling and alternative models for policy evaluation. The paper provides a synopsis of how each approach may be used to explain, model and estimate the macro-economic rebound effect, criticisms that have been suggested against each, and explanations for diversity in quantitative estimates. Conclusions suggest that the importance of the macro-economic rebound effect should not be underestimated.     

Effect of building regulation on energy consumption in residential buildings in Korea

According to the International Energy Agency (IEA), the energy demand for the building sector constituted about 25.3% of the final energy use in South Korea. The energy demand for residential buildings counts for 50.3% of the building sector and has also increased by 2.9 percent every year. The Korean government has shifted focus and is now promoting energy efficiency within the building sector and has set long-term energy conservation goals.Despite these efforts to minimize building energy, the Korean government has changed the building regulation to allow remodeling of the balcony space as a living space. Remodeling the balcony space to become an indoor space means that a buffer space for the outdoor environment is lost, causing thermal discomfort and discomfort glare and moreover, increasing the heating and cooling energy demand in residential buildings. Also, it results in an increase in building energy demand in South Korea.In this study, the effect of the alteration of balcony space on the indoor thermal environment and the heating and cooling energy demand of residential buildings in Korea were investigated by field measurement and simulation. From the measurement results, the indoor temperature of the condition without a balcony was 0.8 °C lower than that with a balcony. The heating and cooling load of the unit without the balcony space was 39% and 22% higher, respectively, than that of the unit with the balcony space. This increase results in considerable energy loss in the national scale and the ratio will be 0.3% of the final energy use in Korea. Also, it represents about 1.3% of the final energy use within the building sector of Korea.     

中国政府大力推进节能减排工作

阐述了中国政府大力推进节能减排的主要措施,包括：①建立政府节能减排工作问责制和加强有关立法;②调整产业结构和推进技术进步：③强化经济激励措施;④在客观和微观两个层面加强节能减排工作的组织领导和能力建设。指出了2007年中国单位GDP能耗进一步下降3．66％,二氧化硫和化学需氧量排放量分别降低了4．66％和3．14％。分析了中国在节能减排方面还需进一步加强和完善的工作。     

Measuring energy rebound effect in the Chinese economy: An economic accounting approach

Estimating the magnitude of China's economy-wide rebound effect has attracted much attention in recent years. Most existing studies measure the rebound effect through the additional energy consumption from technological progress. However, in general technological progress is not equivalent to energy efficiency improvement. Consequently, their estimation may be misleading. To overcome the limitation, this paper develops an alternative approach for estimating energy rebound effect. Based on the proposed approach, China's economy-wide energy rebound effect is revisited. The empirical result shows that during the period 1981–2011 the rebound effects in China are between 30% and 40%, with an average value of 34.3%.     

Achieving low-carbon urban passenger transport in China: Insights from the heterogeneous rebound effect

The rapid increase in energy consumption and carbon emissions in China's passenger transportation sector threatens both the environment and the nation's energy security. Energy efficiency improvements, leading to lower fuel consumption, are therefore of considerable interest to policymakers trying to achieve low-carbon travel. However, it is well established that higher miles per gallon efficiencies can, by reducing the costs of travel, lead to some level of increased personal travel: the so-called ‘rebound effect’. This paper describes an empirical study to measure the size and also the variability in this effect at the provincial level and what this variability implies for a carbon tax policy. This rebound effect is quantified using a two-stage Almost Ideal Demand System (AIDS) model. A backfire effect (i.e. the rebound is ≫100%) is observed in urban passenger transport, with disparities in the size of the rebound effect ranging from 114% to 153% among China's provinces. The differences in economic development as well as related differences in consumers' behavior, especially in the behavior of “marginal consumers”, have contributed to this heterogeneity, with a larger carbon tax (more than 110Yuan/tonne) needed in richer provinces such as Jiangsu, Zhejiang, Guangdong and Fujian in order to bring about similar levels of carbon reductions nationwide.     

Direct rebound effect for urban household in China—an empirical study

Household sector has become one important target sector on which the Chinese government implements its energy-saving and emission reduction policies. Improving energy efficiency is the primary method adopted by the Chinese government for energy conservation. However, its real energy-saving effects would be affected greatly owing to energy rebound effects. In this paper, we set up a Linear Approximation of the Almost Ideal Demand System (LA/AIDS) model to estimate the direct rebound effect for urban households in China, and real energy conservation effect of improving energy efficiency is also obtained. The assessment of the rebound has a lot of uncertainty, and therefore, exact figures are hard to determine. The results show that energy rebound for Chinese urban household is approximately 66%. In this regard, the Chinese government could not accomplish the energy conservation target through improving energy efficiency only. Policy supplements like energy pricing reform are also needed.     

中国能源管理信息化的前景探讨

本文简单回顾了能源管理信息化的发展历程,分析了能源管理信息化的技术特点、推广前景和发展机遇等.认为,在目前我国资源与环境形势日渐严峻的背景下,推广能源管理信息化在微观和宏观层面均具有现实意义,建议在宏观引导、政策激励、科技创新及市场培育等方面加快推进.     

South Korean citizen's preferences on renewable energy support and cooperation policy for North Korea

To solve the continuing North Korean energy problem, the international community has provided, almost continuously, energy aid such as heavy fuel oil. Despite the large amount of energy aid North Korea has received, there is no evidence that the North Korean energy problem has gotten any better. Unless there is an structural energy reconstruction within North Korea, it portends the energy crisis there will only be exacerbated. Thus, North Korean energy solution cannot continue to remain at the level of providing direct aid, but should encompass a sustainable energy system that can answer the North's energy needs in mid- to long-term. Seeking a more permanent solution to solve the North Korean energy crisis, we contend renewable energy (RE) is a suitable option that can be used to build a sustainable energy system that North Korea can self-manage. From the South Korean energy policy perspective, that could be used to provide mid- and long-term energy solution for North Korea and fundamentally solve its energy crisis, this research sought to assess the South Korean residents’ preferences on burdening the cost associated with implementing a South Korean Government (SKG)-led RE support and cooperation policy for the North. We conducted a survey to assess the majority voting trends and approximately 30% of the respondents answered they had “no desire to pay.” The result showed that it would be difficult to fund an energy policy by making the South Korean populace directly shoulder the cost.     

The macro-economic rebound effect and the UK economy

This paper examines the macroeconomic rebound effect for the UK economy arising from energy efficiency policies 2000–2010 using the macroeconomic model, MDM-E3. The literature distinguishes between three types of rebound effect: direct, indirect and economy-wide. The macroeconomic rebound effect considered here is the combination of the indirect and economy-wide effects. Policies for the domestic, business, commercial and public, and transport sectors of the economy are analysed for 2000–2010. Overall, the policies lead to a saving of about 8% of the energy, which would otherwise have been used and a reduction in CO₂ emissions of 10% (or 14 mtC) by 2010. There are also favourable macroeconomic effects: lower inflation and higher growth. We find that the macroeconomic rebound effect arising from UK energy efficiency policies for the period 2000–2010 is around 11% by 2010, averaged across sectors of the economy. When this is added to the (assumed) direct rebound effect of around 15%, this gives a total rebound effect of around 26% arising from these policies. Thus, the findings of the study support the argument that energy efficiency improvements for both consumers and producers, stimulated by policy incentives, will lead to significant reductions in energy demand and hence in greenhouse gas emissions.     

The impacts of removing energy subsidies on economy-wide rebound effects in China: An input-output analysis

Facing with the increasing contradiction of economic growth, energy scarcity and environmental deterioration, energy conservation and emissions abatement have been ambitious targets for the Chinese government. Improving energy efficiency through technological advancement is a primary measure to achieve these targets. However, the existence of energy rebound effects may completely or partially offset energy savings associated with technological advancement. This paper adopted a modified input-output model to estimate the economy-wide energy rebound effects across China's economic sectors with the consideration of energy subsidies. The empirical results show that the aggregate rebound effect of China is about 1.9% in 2007–2010, thus technological advancement significantly restrains energy consumption increasing. Removing energy subsidies will cause the aggregate rebound effect declines to 1.53%. Specifically, removing subsidies for coal and nature gas can reduce the rebound effects signifcantly, while removing the subsidies for oil products has a small impact on rebound effect. The existence of rebound effects implies that technological advancement should be cooperated with energy price reform so as to achieve the energy saving target. In addition, the government should consider the diversity of economic sectors and energy types when design the reform schedule.     

Rebound and disinvestment effects in refined oil consumption and supply resulting from an increase in energy efficiency in the Scottish commercial transport sector

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 refined 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.     

Regional energy rebound effect: The impact of economy-wide and sector level energy efficiency improvement in Georgia,USA

Rebound effect is defined as the lost part of ceteris paribus energy savings from improvements on energy efficiency. In this paper, we investigate economy-wide energy rebound effects by developing a computable general equilibrium (CGE) model for Georgia, USA. The model adopts a highly disaggregated sector profile and highlights the substitution possibilities between different energy sources in the production structure. These two features allow us to better characterize the change in energy use in face of an efficiency shock, and to explore in detail how a sector-level shock propagates throughout the economic structure to generate aggregate impacts. We find that with economy-wide energy efficiency improvement on the production side, economy-wide rebound is moderate. Energy price levels fall very slightly, yet sectors respond to these changing prices quite differently in terms of local production and demand. Energy efficiency improvements in particular sectors (epicenters) induce quite different economy-wide impacts. In general, we expect large rebound if the epicenter sector is an energy production sector, a direct upstream/downstream sector of energy production sectors, a transportation sector or a sector with high production elasticity. Our analysis offers valuable insights for policy makers aiming to achieve energy conservation through increasing energy efficiency.