Economy-wide estimates of the energy rebound effect in BRICS: The role of environmental regulations and economic policy uncertainty

Asad Abbas Shah and Donglan Zha

Energy, 2025, vol. 320, issue C

Abstract: This study examines the economy-wide energy rebound effect (ERE) and how environmental policy stringency and economic policy uncertainty affect the ERE phenomenon in BRICS countries from 1990 to 2020. The study estimated energy efficiency using stochastic frontier analysis and ERE through panel-corrected standard error methods and the instrumental variable method to address potential endogeneity issues. The study revealed a partial ERE (PERE) ranging from 1.5 % to 70 % for the panel and individual BRICS countries except Russia, which exhibits a super-conservation effect of −36 %. The study found that the economy-wide ERE varies with EPS levels, leading to PERE in all BRICS states, albeit the magnitude varies from 6 % to 83 %. Likewise, the ERE varies based on the level of EPU and leads to a PERE of 19 %–72 % in all countries except Russia, which resulted in a super conservation effect. The findings suggest that all BRICS members, especially India and South Africa should improve energy efficiency to decrease fossil fuel energy consumption and protect the environment. Furthermore, Russia, India, and South Africa should prioritize EPS to control the ERE. South Africa, Brazil, and India governments should prioritize maintaining a stable and predictable economic environment to control ERE induced by EE.

Keywords: Stochastic frontier analysis; Energy efficiency analysis; Energy rebound effect; Environmental policy stringency; Economic policy uncertainty (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:320:y:2025:i:c:s0360544225009181

DOI: 10.1016/j.energy.2025.135276

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