Picture of UK Houses of Parliament

Leading national thinking on politics, government & public policy through Open Access research

Strathprints makes available scholarly Open Access content by researchers in the School of Government & Public Policy, based within the Faculty of Humanities & Social Sciences.

Research here is 1st in Scotland for research intensity and spans a wide range of domains. The Department of Politics demonstrates expertise in understanding parties, elections and public opinion, with additional emphases on political economy, institutions and international relations. This international angle is reflected in the European Policies Research Centre (EPRC) which conducts comparative research on public policy. Meanwhile, the Centre for Energy Policy provides independent expertise on energy, working across multidisciplinary groups to shape policy for a low carbon economy.

Explore the Open Access research of the School of Government & Public Policy. Or explore all of Strathclyde's Open Access research...

Reducing rebound without sacrificing macroeconomic benefits of increased energy efficiency

Turner, Karen and Figus, Gioele and Lecca, Patrizio and Swales, Kim (2016) Reducing rebound without sacrificing macroeconomic benefits of increased energy efficiency. In: International Association for Energy Economics Internationa Conference Bergen 2016, 2016-06-19 - 2016-06-22, Bergen.

Text (Turner-etal-IAEE-2016-Reducing-rebound-without-sacrificing-macroeconomic-benefits-of-increased-energy-efficiency)
Final Published Version

Download (293kB)| Preview


    Previous research has shown that increased efficiency in the use of energy triggers price and income effects that result in cost- or demand-led economic expansion processes (depending on whether efficiency improves on the production or consumption side of the economy). However, this generates rebound in energy use at the economywide level that partially offsets expected energy savings in the more efficiency activity. The question we set out to address here is whether economy-wide rebound effects can be reduced without sacrificing macroeconomic benefits. We hypothesise that this may be possible if increased efficiency in production leads to a reduction in the relative price of something that is a substitute for an energy-intensive activity elsewhere in the economy. That is by changing the composition of consumption, for example favouring (low carbon) electricity over gas, or public over private transport. We consider the latter example here by simulating an increase in energy efficiency in the provision of public transport in the UK using a computable general equilibrium (CGE) model. The key assumption in our analysis is that private transport is a competing, and relatively energy-intensive substitute for the more efficient public transport provision. Our key finding is that by varying just one parameter in our CGE model – the elasticity governing the extent to which households are prepared to substitute away from private in favour of public transport as the relative price changes in favour of the latter – we get marked variation in the magnitude of the economy-wide rebound effect with negligible (if any) impact on key macroeconomic impacts. That is, we show that it is possible to maximise both macroeconomic benefits and energy savings the more UK households can be persuaded to switch their transportation needs in favour of more efficient and competitive public transport options.