The impact of increased efficiency in the industrial use of energy: A computable general equilibrium analysis for the United Kingdom

By G. Allan, N. Hanley, P. McGregor, K. Swales, K. Turner. 2007

252 citations recorded by the source corpus.

The conventional wisdom is that improving energy efficiency will lower energy use. However, there is an extensive debate in the energy economics/policy literature concerning “rebound” effects. These occur because an improvement in energy efficiency produces a fall in the effective price of energy services. The response of the economic system to this price fall at least partially offsets the expected beneficial impact of the energy efficiency gain. In this paper we use an economy–energy–environment computable general equilibrium (CGE) model for the UK to measure the impact of a 5% across the board improvement in the efficiency of energy use in all production sectors. We identify rebound effects of the order of 30–50%, but no backfire (no increase in energy use). However, these results are sensitive to the assumed structure of the labour market, key production elasticities, the time period under consideration and the mechanism through which increased government revenues are recycled back to the economy.

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

View Paper: https://www.semanticscholar.org/paper/e806f099607023fcc4f40b9d1875cb27df41e985

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Environmental Engineering

1. Boqiang Lin
2. K. Turner
3. Peng Zhou
4. Dequn Zhou
5. Hui Wang
6. Charlotte Berg
7. Thomas Broberg
8. Eva Samakovlis

In Renewable Energy, Sustainability and the Environment

1. K. Turner
2. Charlotte Berg
3. Thomas Broberg
4. Eva Samakovlis
5. N. Hanley
6. Boqiang Lin
7. T. Wei
8. Dequn Zhou

Citations in the corpus

• Energy efficiency, rebound effects and the environmental Kuznets Curve (2011, methodology): “In earlier papers (Allan et al, 2007; Anson and Turner, 2009; Hanley et al, 2006, 2009; Turner, 2008, 2009), we have shown that exogenous improvements in energy efficiency are likely to produce economy-wide rebound or backfire effects that partially or wholly offset energy savings from these pure…”
• Negative rebound and disinvestment effects in response to an improvement in energy efficiency in the UK economy (2009, background): “On the other hand, Allan et al (2007) conclude that the UK results are most sensitive to elasticities of substitution in production (particularly between the energy and non-energy composites).”
• Solow meets Leontief: Economic growth and energy consumption (2010, background): “2 A Channel from Energy Use to Growth A growth model with renewable and nonrenewable resources and perfect mobility of commodities consists of the following equations: (1); (2); (3); (4); (5); (6); (7) and Ait+1 = (1 + gi)Ait: In addition, the competitive factor markets imply that, in each period, e”
• Dilemma between economic development and energy conservation: Energy rebound effect in China☆ (2012, methodology): “In addition, with the development of Computable General Equilibrium (CGE) model, several studies use CGE model to measure the energy rebound effect [1,27,28].”
• A general equilibrium view of global rebound effects (2010, background): “This result can be used to explain the empirical findings by Allan et al. (2007) and Turner (2009).”
• An empirical study of direct rebound effect for passenger transport in urban China (2012, background): “Bentzen (2004), Allan et al. (2007), Barker et al. (2007), Saunders (2008), Turner (2009), Freire Gonzalez (2010), Turner and Hanley (2010) and Wei (2010). Among the bulk of previous studies, estimating the rebound effect for the transport sector has been paid much attention to. See, for example, Gr”
• The economy-wide rebound effect from improved energy efficiency in Swedish industries–A general equilibrium analysis (2015, methodology): “The sensitivity of the results is somewhat lower, but still in line with the findings in Allan et al. (2007), but more significant than that found in Hanley et al. (2009).7 5 Note that the increase in energy efficiency only applies to the fuels modelled in the EMEC model.”