Modelling the Economy-wide Rebound Effect

In this chapter we address the question: how large are the system-wide rebound effects likely to be for general improvements in energy efficiency in production activities in a developed economy? Most studies focus on the direct rebound effects, often in the context of the demand for consumer services (Greening et al., 2000; Sorrell, 2007). This restricts the analysis solely to the energy required to provide the consumer services to which the efficiency improvement directly applies. There is, to date, comparatively little evidence on the scale of non-direct or system-wide effects that reflect the relative price, output and income changes induced by improvements in energy efficiency (Greening et al., 2000).

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