Energy efficiency in general equilibrium with input–output linkages

Christopher J. Blackburn and Juan Moreno-Cruz

Journal of Environmental Economics and Management, 2021, vol. 110, issue C

Abstract: Industrial activity periodically experiences breakthrough innovations in energy efficiency, but the estimated impacts of these innovations on aggregate energy use are highly varied. We develop a general equilibrium model to show this variation is in part determined by the structure of the economy’s input–output network. Our results show industrial energy efficiency improvements affect aggregate energy use through adjustments in factor and commodity markets, and a process of structural transformation that alters the way energy is used and produced in the economy. We describe the aggregate impact of these processes using new energy centrality concepts that measure the extent to which an industry implicitly produces or consumes energy resources. In a calibrated simulation, we find variation in these energy centrality concepts explains between 38 and 92% of variation in the rebound effect, which suggests input–output structure is a critical determinant of the aggregate effects of energy efficiency.

Keywords: Energy efficiency; Production network; Input–output; Rebound effect (search for similar items in EconPapers)
JEL-codes: C67 D58 L23 O33 Q43 Q58 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Energy Efficiency in General Equilibrium with Input-Output Linkages (2020)
Working Paper: Energy Efficiency in General Equilibrium with Input-Output Linkages (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:110:y:2021:i:c:s0095069621000887

DOI: 10.1016/j.jeem.2021.102524

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