General equilibrium rebound from energy efficiency innovation

Research output: Contribution to journalArticle

3 Scopus citations

Abstract

Energy efficiency improvements “rebound” when economic responses undercut their direct energy savings. I show that general equilibrium channels typically amplify rebound by making consumption goods cheaper but typically dampen rebound by increasing demand for non-energy inputs to production and by changing the size of the energy supply sector. Improvements in the efficiency of the energy supply sector generate especially large rebound because they make energy cheaper in all other sectors. Quantitatively, general equilibrium channels reduce rebound in U.S. consumption good sectors from 39% to 28% but increase rebound in the energy supply sector from 42% to 80%.

Original languageEnglish (US)
Article number103431
JournalEuropean Economic Review
Volume125
DOIs
StatePublished - Jun 2020

Keywords

  • Backfire
  • Efficiency
  • Factor bias
  • Factor intensity
  • Factor productivity
  • Rebound
  • Substitution

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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