ESRI Research Seminar: "Can We Reduce Rebound Without Sacrificing Macroeconomic Benefits Of Increased Energy Efficiency In Public/Freight Transport?"

Venue: ESRI, Whitaker Square, Sir John Rogerson’s Quay, Dublin 2

Speaker: Karen Turner (Centre for Energy Policy, University of Strathclyde International Public Policy Institute), co-authored with Patrizio Lecca and Kim Swales (Fraser of Allander Institute, University of Strathclyde)

Previous research has shown that increased efficiency in the use of energy triggers price and income effects that result in productivity- or demand-led economic growth processes (depending on whether efficiency improves on the production or consumption side of the economy) but which are accompanied by a rebound in energy use at the economy-wide level, partially offsetting 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 take the example of increased energy efficiency in the provision of public and freight transport and use a multi-sector CGE model to examine the impacts on household fuel use in personal transportation, where this is a competing, and relatively energy-intensive competitor for the more efficient public/freight provision. Our key finding is that by varying just one parameter in the model – the elasticity that governs household substitution between personal and the more public/freight transport as the relative price changes – we get marked variation in the magnitude of the economy-wide rebound effect with negligible (if any) impact on key macroeconomic impacts.
[This work is part of an EPSRC ‘Working with the [EUED] Centres’ project titled ‘Energy Saving Innovations and Economy-Wide Rebound Effects’ Link

Karen Turner
Karen is Director of the Centre for Energy Policy at the University of Strathclyde International Public Policy Institute. She has previously held academic posts at in the Economics Departments at Heriot-Watt, Stirling and Strathclyde Universities. Karen was one of six ESRC Climate Change Leadership Fellows and her main research interests in energy and climate policy, with particular focus on modelling energy-economy-environment interactions. The main focus of her current work is modelling economy-wide impacts of energy efficiency enhancing and/or carbon reduction technologies such as CCS. She is Principle Investigator on the EPSRC ‘Working with the [EUED] Centres project titled ‘Energy Saving Innovations and Economy-wide Rebound Effects’.