Energy conservation is widely accepted as an important strategy to combat climate change. It can, nevertheless, stimulate
new energy uses that partly offset the original savings. This is known as rebound. One particular rebound mechanism is re-spending
of money savings associated with energy savings on energy intensive goods or services. We calculate the average magnitude
of this "re-spending rebound" for different fuels and countries. We find that emerging economies, neglected in past studies,
typically have substantially larger rebounds than OECD countries. The effect is generally stronger for gasoline than for natural
gas and electricity. Paradoxically, strengthening financial incentives to conserve energy tends to increase rebound. This
is expected to gain importance with climate regulation and peak oil. In the last section of the paper, the policy implications
of our findings are discussed.
Forschungsbereich:Klima-, Umwelt- und Ressourcenökonomie
