General equilibrium rebound from energy efficiency innovation

Derek Lemoine

European Economic Review, 2020, vol. 125, issue C

Abstract: Energy efficiency improvements “rebound” when economic responses undercut their direct energy savings. I show that general equilibrium channels typically amplify rebound by making consumption goods cheaper but typically dampen rebound by increasing demand for non-energy inputs to production and by changing the size of the energy supply sector. Improvements in the efficiency of the energy supply sector generate especially large rebound because they make energy cheaper in all other sectors. Quantitatively, general equilibrium channels reduce rebound in U.S. consumption good sectors from 39% to 28% but increase rebound in the energy supply sector from 42% to 80%.

Keywords: Factor productivity; Factor intensity; Factor bias; Efficiency; Rebound; Backfire; Substitution (search for similar items in EconPapers)
JEL-codes: D58 O31 O33 Q41 (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (12)

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Working Paper: General Equilibrium Rebound from Energy Efficiency Innovation (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:125:y:2020:i:c:s0014292120300635

DOI: 10.1016/j.euroecorev.2020.103431

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