Scandinavian Working Papers in Economics

CERE Working Papers,
CERE - the Center for Environmental and Resource Economics

No 2014:8: The economy-wide rebound effect from improved energy efficiency in Swedish industries – A general equilibrium analysis

Thomas Broberg (), Charlotte Berg and Eva Samakovlis
Additional contact information
Thomas Broberg: CERE, Postal: Centre for Environmental and Resource Economics, Umeå University, SE-901 87 Umeå, Sweden
Charlotte Berg: National Institute of Economic Research, Postal: National Institute of Economic Research, Box 3116, SE-10362 Stockholm, Sweden
Eva Samakovlis: National Institute of Economic Research, Postal: National Institute of Economic Research, Box 3116, SE-10362 Stockholm, Sweden

Abstract: The objective of this paper is to analyze the rebound effect from increased efficiency in industrial use of energy in Sweden. Energy efficiency improvements can have sig-nificant micro- and macroeconomic effects that hampers the positive effect on real energy savings. To assess the size of the overall rebound effect in the Swedish econo-my we apply a computable general equilibrium model. The results show that the economy-wide rebound effect in Sweden depends on a number of factors, e.g. the extent of the energy efficiency improvement, how the labour market is modeled as well as if the increase in energy efficiency is combined with a cost or not. We find that the rebound effect following a 5 percent increase of energy efficiency in the Swedish industry lies in the range of 40-70 percent. When energy efficiency only is improved in energy-intensive production, the rebound effect becomes even higher. These findings are in line with the results in the literature.

Keywords: rebound effect; energy efficiency; energy use; industry; computable general equilibrium

JEL-codes: C68; D24; D58; Q43; Q55; Q58

24 pages, September 9, 2014

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