A general equilibrium assessment of the rebound effectthe spanish case

Resumen

Productivity improvements in energy use allow for "doing the same with less". However, very often there is not an immediate or automatic equivalence between these efficiency gains and the actual energy savings. The reason is that technological change that promotes energy efficiency may also imply "doing more because is less costly". This is in fact the informal definition of the rebound effect also known in the literature as the Khazzoom-Brookes postulate (1980, 1990). This effect traces back to the decline in the effective price of energy from efficiency improvements. Consequently, the presence of this perverse effect generates a wedge between actual and potential energy savings that negatively affect the degree of effectiveness of energy efficiency policies. Due to the growing interest in these policies in the European and Spanish context as well as the novelty of rebound issues on the economic literature, exploring the rebound effect from a general equilibrium perspective constitutes the key contribution of this thesis. Because rebound effects are general rather than partial in nature, a general equilibrium analysis is a methodological must. This thesis uses a general equilibrium approach to produce empirical evidence about this fact: Rebound effects from energy efficiency improvements constitute the result of direct and indirect effects once all existing economy-wide interactions are accounted for. Using a novel data set ( a SAM 2004 for the Spanish Economy) and making a non-rival use of both Input-Output Analysis and Computational General Equilibrium methodology, this thesis focuses on exploring the role played by sectoral market interdependencies, the characteristics of technology, in terms of the structure of the KLEM production function, plus factor supply conditions on the presence and size of economy-wide rebound effects. Once these features on rebound impacts are analysed, this thesis also evaluates potential policy and non-policy scenarios whereby these perverse impacts of energy efficiency policies might be effectively mitigated.