Negative rebound and disinvestment effects in response to an improvement in energy efficiency in the UK economy

By K. Turner. 2009

224 citations recorded by the source corpus.

This paper uses a computable general equilibrium (CGE) framework to investigate the conditions under which rebound effects may occur in response to increases in energy efficiency in the UK national economy. Previous work for the UK has suggested that rebound effects will occur even where key elasticities of substitution in production are set close to zero. The research reported in this paper involves carrying out a systematic sensitivity analysis, where relative price sensitivity is gradually introduced into the system, focusing specifically on elasticities of substitution in production and trade parameters, in order to determine conditions under which rebound effects become a likely outcome. The main result is that, while there is positive pressure for rebound effects even where (direct and indirect) demands for energy are very price inelastic, this may be partially or wholly offset by negative income, competitiveness and disinvestment effects, which also occur in response to falling energy prices. The occurrence of disinvestment effects is of particular interest. These occur where falling energy prices reduce profitability in domestic energy supply sectors, leading to a contraction in capital stock in these sectors, which may in turn lead to rebound effects that are smaller in the long run than in the short run, a result that runs contrary to the predictions of previous theoretical work in this area.

Subfields: Economics and Econometrics, Environmental Engineering, Renewable Energy, Sustainability and the Environment

View Paper: https://www.semanticscholar.org/paper/25121e93dd4d8c2aab92a4d24b11611276da2e77

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Citations in the corpus

“Rebound” Effects from Increased Energy Efficiency: A Time to Pause and Reflect (2013, methodology): “Turner (2009) considers this issue for the case of energy efﬁciency in production in a computable general equilibrium (CGE) modelling context.”
Energy efficiency, rebound effects and the environmental Kuznets Curve (2011, methodology): “If the rental rate exceeds the user cost, desired capital stock is greater than the actual capital stock and there is therefore an incentive to increase capital stock (and vice versa – see Turner, 2009).”
The Rebound Effect and Energy Efficiency Policy (2016, background): “Some of the most interesting studies in this literature build computable general equilibrium or econometric simulation models of the U.K. economy (e.g., Barker, Ekins, and Foxon 2007; Barker, Dagoumas, and Rubin 2009; Turner 2009).”
An empirical study of direct rebound effect for passenger transport in urban China (2012, background): “Many researchers have devoted to estimate the rebound effect for various sectors in different countries, e.g. Bentzen (2004), Allan et al. (2007), Barker et al. (2007), Saunders (2008), Turner (2009), Freire Gonzalez (2010), Turner and Hanley (2010) and Wei (2010).”
The foundations of the environmental rebound effect and its contribution towards a general framework (2016, unknown): “…the progressive inclusion of capital costs in rebound studies (Mizobuchi, 2008; Nässén and 510 Holmberg, 2009) and macroeconomic effects related to negative income, competitiveness and 511 disinvestment (Turner, 2009) has brought up capricious results in the form of ‘negative rebound 512 effects’.”
Assessing the Effectiveness of Energy Efficiency Measures in the Residential Sector Gas Consumption Through Dynamic Treatment Effects: Evidence from England and Wales (2022, background): “Authors like Gillingham et al. (2016), Greening et al. (2000) and Turner (2009) among others have highlighted this as an area for future research.”
Energy efficiency and economy-wide rebound effects: A review of the evidence and its implications (2021, background): “Sources: Own elaboration based upon [21,71,93].”
Consumer End-Use Energy Efficiency and Rebound Effects (2014, background): “Quite a few of the efforts to estimate economy-wide rebound effects have found that backfire can occur; that is, as a result of energy efficiency investments, the consumption of energy (or emissions) increases above where it was before the intervention (31).”
The economy-wide rebound effect from improved energy efficiency in Swedish industries–A general equilibrium analysis (2015, background): “(2007) can be explained by a negative investment effect in the electricity sector (Turner, 2009).”
A general equilibrium view of global rebound effects (2010, background): “(2007) and Turner (2009) show that both shortrun and long-run rebound e¤ects are considerable, and surprisingly short-run rebound e¤ects are greater than long-run e¤ects, which seems to contradict previous theoretical studies on rebound e¤ects (e.”
Estimating direct and indirect rebound effects for U.S. households with input–output analysis Part 1: Theoretical framework (2013, background): “In the long-term, such changes in energy prices could lead to shifts in economic structure and disinvestment effects (Greening et al., 2000; Turner, 2009).”