2 research outputs found
Economy-wide estimates of rebound effects: evidence from panel data
Energy consumption and greenhouse emissions across many countries have increased overtime despite widespread energy efficiency improvements. One explanation offered in the literature is the rebound effect (RE), however there is a debate about its magnitude and the appropriate model for estimating it. Using a combined stochastic frontier analysis (SFA) and two-stage dynamic panel data approach, we explore these two issues of magnitude and model for 55 countries over the period 1980 to 2010. Our central estimates indicate that in the short-run, 100% energy efficiency improvement is followed by 90% rebound in energy consumption, but in the long-run it leads to a 136% decrease in energy consumption. Overall, our estimated cross-country RE magnitudes indicate the need to consider or account for RE when energy forecasts and policy measures are derived from potential energy efficiency savings
Carbon tax and energy intensity: assessing the channels of impact using UK microdata
Prior empirical studies indicate that carbon taxes have a negative impact on energy intensity,
yet, the literature is unable to shed much light on the channels through which a moderate carbon
tax reduces industrial energy intensity. Using a two-stage econometric approach, we provide
the first comprehensive analysis of the five components of the energy intensity gain (EIG)
arising from the UK climate change levy (CCL). First, we propose an EIG decomposition based
on a stochastic energy cost frontier and a confidential panel of UK manufacturing plants
covering 2001-2006. In the second stage, we identify the impact of the CCL on EIG
components using an instrumental variable (IV) approach that addresses the endogeneity of the
carbon tax rules. Factor substitution and technological progress are the dominant firm
responses to the CCL, while energy efficiency is surprisingly the least responsive component.
Our findings underscore the challenge arising from overreliance on narrow energy policy
objectives such as energy efficiency improvements, suggesting that a broader policy approach
aimed at improving overall firm resource allocation might be more appropriate