Energies 2014, 7(5), 2850-2873; doi:10.3390/en7052850
Article

Energy Substitution, Technical Change and Rebound Effects

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Received: 28 February 2014; in revised form: 13 April 2014 / Accepted: 16 April 2014 / Published: 29 April 2014
(This article belongs to the Special Issue Energy Transitions and Economic Change)
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Abstract: This paper investigates the relationships between energy efficiency improvements by producers, the ease of substitution between energy and other inputs and the size of the resulting “rebound effects”. Fundamentally, easier substitution leads to larger rebounds. Focusing upon conceptual and methodological issues, the paper highlights the challenges of estimating and modeling rebound effects with the help of production and cost functions and questions the robustness of the evidence base in this area. It argues that the multiple definitions of “elasticities of substitution” are a source of confusion, the most commonly estimated elasticity is of little practical value, the empirical literature is contradictory, prone to bias and difficult to use and there are only tenuous links between this literature and the assumptions used within energy-economic models. While “energy-augmenting technical change” provides the natural choice of independent variable for an estimate of rebound effects, most empirical studies do not estimate this form of technical change, many modeling studies do not simulate it and others simulate it in such a way as to underestimate rebound effects. As a result, the paper argues that current econometric and modeling studies do not provide reliable guidance on the magnitude of rebound effects in different industrial sectors.
Keywords: rebound effects; elasticities of substitution; energy augmenting technical change
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MDPI and ACS Style

Sorrell, S. Energy Substitution, Technical Change and Rebound Effects. Energies 2014, 7, 2850-2873.

AMA Style

Sorrell S. Energy Substitution, Technical Change and Rebound Effects. Energies. 2014; 7(5):2850-2873.

Chicago/Turabian Style

Sorrell, Steve. 2014. "Energy Substitution, Technical Change and Rebound Effects." Energies 7, no. 5: 2850-2873.

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