Energy Saving Innovations and Economy Wide Rebound Effects : Research Briefing 01

Turner, Karen (2015) Energy Saving Innovations and Economy Wide Rebound Effects : Research Briefing 01. [Report]

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    Improved energy efficiency is generally recognised as the most important and cost-effective route to addressing the energy trilemma. The IEA estimate that energy efficiency gains could contribute approximately 70% of global emission reductions in the period to 2020, and ~50% in the period to 2035. EU member states have agreed legally binding targets to improve energy efficiency and the UK has developed a wide-ranging energy efficiency strategy that includes policies for all sectors of the economy.But economies are complex and dynamic systems and energy efficiency improvements frequently fail to deliver the anticipated energy and emission savings. This is largely due to a variety of mechanisms known as ‘rebound effects’ which can reduce the energy and emission savings achieved. In some cases, rebound effects may even lead to an overall increase in energy consumption. Unless such effects are better understood and addressed, the UK and other countries may fail to meet their energy and emission targets. The Centre on Innovation and Energy Demand (CIED) is investigating the source, nature and magnitude of rebound effects in a number of UK sectors. Led by the Centre for Energy Policy at the University of Strathclyde, this new project on economy wide rebound effects significantly extends CIED’s work. The project investigates the impact of energy efficiency improvements throughout the UK economy and along international supply chains, as well as using sophisticated multi-sector macroeconomic models to capture a much wider range of economic effects.