International spillover and rebound effects from increased energy efficiency in Germany

Turner, Karen and Koesler, Simon and Swales, Kim (2015) International spillover and rebound effects from increased energy efficiency in Germany. In: ENTRACTE “Workshop on Policy Interactions and Overlapping Policies”, 2015-02-17 - 2015-02-17.

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Abstract

The pollution/energy leakage literature raises the concern that policies implemented in one country, such as a carbon tax or tight energy restrictions, might simply result in the reallocation of energy use to other countries. Our research addresses these concerns in the context of policies to increase energy efficiency, rather than direct action to reduce energy use. Using a global CGE simulation model, we extend the analyses of ‘economy-wide’ rebound from the national focus of previous studies to incorporate international spill-over effects from trade in goods and services. Our focus is to investigate whether these effects have the potential to increase or reduce the overall (global) rebound of local energy efficiency improvements. In the case we consider, increased energy efficiency in German production generates changes in comparative advantage that produce negative leakage effects, thereby actually rendering global rebound less than national rebound. The presentation at the ENTRACTE workshop will focus in particular on downward pressures on economy-wide rebound effects that result more generally from changes in competitiveness as well as the capacity and pricing decisions of energy suppliers.