The added value from a general equilibrium analyses of increased efficiency in household energy use

Patrizio Lecca, Peter McGregor, John Swales () and Karen Turner

No 2013-39, SIRE Discussion Papers from Scottish Institute for Research in Economics (SIRE)

Abstract: The aim of the paper is to identify the added value from using general equilibrium techniques to consider the economy-wide impacts of increased efficiency in household energy use. We take as an illustrative case study the effect of a 5% improvement in household energy efficiency on the UK economy. This impact is measured through simulations that use models that have increasing degrees of endogeneity but are calibrated on a common data set. That is to say, we calculate rebound effects for models that progress from the most basic partial equilibrium approach to a fully specified general equilibrium treatment. The size of the rebound effect on total energy use depends upon: the elasticity of substitution of energy in household consumption; the energy intensity of the different elements of household consumption demand; and the impact of changes in income, economic activity and relative prices. A general equilibrium model is required to capture these final three impacts.

Keywords: Energy efficiency; indirect rebound effects; economy-wide rebound effects; household energy consumption; CGE models (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-cmp and nep-ene
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Citations: View citations in EconPapers (2)

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Journal Article: The added value from a general equilibrium analysis of increased efficiency in household energy use (2014)
Working Paper: The added value from a general equilibrium analyses of increased efficiency in household energy use (2013)
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