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Energy efficiency as an instrument of regional development policy? Trading-off the benefits of an economic stimulus and energy rebound effects

Gioele Figus, Patrizio Lecca, Peter McGregor and Karen Turner

No 1702, Working Papers from University of Strathclyde Business School, Department of Economics

Abstract: Previous studies show that improving efficiency in household energy use can stimulate a national economy through an increase and change in the pattern of the aggregate demand. However, this may impact competitiveness. Here we find that in an open region, interregional migration of workers may give additional momentum to the economic expansion, by relieving pressure on the real wage and the CPI. Furthermore, the stimulus will be further enhanced by the greater fiscal autonomy that Scotland is set shortly to enjoy. By considering a range of CGE simulation scenarios we show that there is a tension between the economic stimulus from energy efficiency and the scale of rebound effects. However, we also show that household energy efficiency increases do typically generate a “double dividend†of increased regional economic activity and a reduction in carbon emissions.

Keywords: energy efficiency; regional development policy; energy rebound; regional fiscal autonomy; general equilibrium (search for similar items in EconPapers)
JEL-codes: C68 D58 Q43 Q48 R28 R58 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2017-02
New Economics Papers: this item is included in nep-cmp, nep-ene, nep-reg and nep-ure
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Citations: View citations in EconPapers (1)

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