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The rebound effect and its representation in energy and climate models

Gloria Colmenares, Andreas Löschel () and Reinhard Madlener ()

No 106, CAWM Discussion Papers from University of Münster, Center of Applied Economic Research Münster (CAWM)

Abstract: In this paper, we review the state-of-the-art and common practice of energy and climate modeling vis-à-vis the rebound literature, in particular regarding how macroeconomic energy and climate models quantify and include energy and greenhouse gas rebound effects. First, we focus on rebound effects in models of costless energy efficiency improvement that hold other attributes constant (zero-cost breakthrough), and an energy efficiency policy that may be bundled with other product changes that affect energy use (policy-induced efficiency improvement) (Gillingham et al. 2015). Second, we examine macroeconomic studies focusing on energy efficiency both in industry and in private households. Third, we go through a general theoretical revision from micro- to macroeconomic levels (the aggregation level) to include a review of the so-called meso-level studies (focused on the analysis of the production side). From 118 recent studies along the aggregation level, out of which 25 compute rebound calculations, we find that the average energy rebound effect is 58% with a standard deviation of 58%, and when we include green house gas rebound calculations, the magnitude is of the order of 43% with a standard deviation of 55%. Finally, we argue that the rebound effect is a phenomenon that requires a sound understanding of the complex interactions from different dimensions (e.g. aggregation level, heterogeneity, climate, energy conservation and economic growth), and we provide some ideas and motivations for future research.

Keywords: Rebound effect; Macroeconomic models; Energy efficiency; Energy policy (search for similar items in EconPapers)
JEL-codes: E13 Q41 Q43 Q48 Q54 R13 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-ene, nep-env, nep-mac and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cawmdp:106

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