A Dynamic Analysis of Industrial Energy Efficiency and the Rebound Effect

29 Pages Posted: 30 Mar 2020

See all articles by Golnaz Amjadi

Golnaz Amjadi

STATEC; Swedish University of Agricultural Sciences (SLU) - Center for Environmental and Resource Economics (CERE)

Tommy Lundgren

Umea School of Business and Economics

Wenchao Zhou

Swedish University of Agricultural Sciences (SLU) - Center for Environmental and Resource Economics (CERE)

Date Written: March 2, 2020

Abstract

Energy efficiency improvement (EEI) is known as a cost-effective measure to meet energy, climate change and sustainable development targets. However, behavioral responses to such improvements referred to as energy rebound effect may change the emission and energy saving gains expected from EEI. Despite broad consensus around the existence of energy rebound effect, significant divergence exists on how to measure this effect, which matters in order to set up realistic energy and climate policies. In this study, we propose a new approach to measure the energy rebound effect in both the short and the long run using a two-stage procedure, applied to a firm-level data set from Swedish manufacturing industry over the period 1997–2008. In the first stage, we use data envelopment analysis (DEA) in order to obtain energy efficiency scores. In the second stage, we estimate energy rebound effect using dynamic panel data regression model. We show that in the short run, partial rebound effects exist within all manufacturing sectors, meaning that the rebound effect decreases, but does not totally offset, the potential energy and emission savings expected from EEI. In the long run, our results suggest that rebound effects decrease within most of the sectors.

Keywords: Energy Efficiency Improvement, Rebound Effect, Data Envelopment Analysis

Suggested Citation

Amjadi, Golnaz and Lundgren, Tommy and Zhou, Wenchao, A Dynamic Analysis of Industrial Energy Efficiency and the Rebound Effect (March 2, 2020). Available at SSRN: https://ssrn.com/abstract=3547679 or http://dx.doi.org/10.2139/ssrn.3547679

Golnaz Amjadi (Contact Author)

STATEC ( email )

BP 304
Luxembourg City, L-2013
Luxembourg

Swedish University of Agricultural Sciences (SLU) - Center for Environmental and Resource Economics (CERE) ( email )

Almas Allé 10
Umeå, 750 07
Sweden

Tommy Lundgren

Umea School of Business and Economics ( email )

Biblioteksgränd 6
Umea, 901 87
Sweden

Wenchao Zhou

Swedish University of Agricultural Sciences (SLU) - Center for Environmental and Resource Economics (CERE)

Almas Allé 10
Umeå, 750 07
Sweden

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