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Research article - Peer-reviewed, 2022

A dynamic analysis of industrial energy efficiency and the rebound effect: implications for carbon emissions and sustainability

Amjadi, Golnaz; Lundgren, Tommy; Zhou, Wenchao;

Abstract

Energy efficiency improvement (EEI) is generally known to be a cost-effective measure for meeting energy, climate, and sustainable growth targets. Unfortunately, behavioral responses to such improvements (called energy rebound effects) may reduce the expected savings in energy and emissions from EEI. Hence, the size of this effect should be considered to help design efficient energy and climate targets. Currently, there are significant differences in approaches for measuring the rebound effect. Here, we used a two-step procedure to measure both short- and long-term energy rebound effects in the Swedish manufacturing industry. In the first step, we used data envelopment analysis (DEA) to measure energy efficiency. In the second step, we use the efficiency scores and estimated a derived energy demand equation including rebound effects using a dynamic panel regression model. This approach was applied to a firm-level panel dataset covering 14 sectors in Swedish manufacturing over the period 1997-2008. We showed that, in the short run, partial and statistically significant rebound effects exist within all manufacturing sectors, meaning that the rebound effect decreased the energy and emission savings expected from EEI. The long-term rebound effect was in general smaller than the short-term effect, implying that within each sector, energy and emission savings due to EEI are larger in the long run compared to the short run. Using our estimates of energy efficiency and rebound effect, we further performed a post-estimation analysis to provide a guide to policy makers by identifying sectors where EEI have the most potential to promote sustainable economic growth with the lowest environmental impact.

Keywords

Energy efficiency improvement; Rebound effect; Data envelopment analysis; Sustainable economic growth

Published in

Energy Efficiency

2022, volume: 15, number: 7, article number: 54
Publisher: SPRINGER

Authors' information

Amjadi, Golnaz
Umea University
Umea University
Swedish University of Agricultural Sciences, Department of Forest Economics
Zhou, Wenchao
Umea University

Sustainable Development Goals

SDG7 Affordable and clean energy

UKÄ Subject classification

Economics
Energy Systems

Publication Identifiers

DOI: https://doi.org/10.1007/s12053-022-10059-4

URI (permanent link to this page)

https://res.slu.se/id/publ/119441