Increased Energy Efficiency and the Rebound Effect: Effects on consumption and emissions

Runar Brännlund (), Tarek Ghalwash () and Jonas Nordström
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Runar Brännlund: Department of Economics, Umeå University, Postal: S 901 87 Umeå, Sweden

No 642, Umeå Economic Studies from Umeå University, Department of Economics

Abstract: In this paper we examine how the Swedish consumers consumption basket have changed over time, and how this have affected emissions of carbon dioxide (CO2), sulphur dioxide (SO2) and nitrogen oxide (NOx). More specifically we examine how exogenous technological progress in terms of an increase in energy efficiency affects consumption and emissions. Due to the change in energy efficiency we calculate the necessary change in the CO2 tax to keep CO2 emissions at the initial level, and how this affects emissions of sulphur dioxide and nitrogen oxides. The results indicate that an increased energy efficiency of 20 percent will increase the emissions of CO2 by approximately 5 percent. To reduce the CO2 emissions to the initial level, the CO2 tax has to be raised by 130 percent. This tax increase will reduce the emissions of sulphur dioxide below the initial level, but will leave the emissions of nitrogen oxides at a higher level than the initial one. Thus, if marginal damages from sulphur dioxide and nitrogen dioxide are non-constant, additional policy instruments are needed.

Keywords: Household consumption; energy demand; emissions; taxation. (search for similar items in EconPapers)
JEL-codes: D12 H31 Q41 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2004-11-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (76)

Published in Energy Economics, 2007, pages 1-17.

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Journal Article: Increased energy efficiency and the rebound effect: Effects on consumption and emissions (2007)
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