macroeconomics of stagflation under flexible exchange rates the concerns of macroeconomic policy in the industrial countries in recent years have shifted the focus of open economy ncroeconomics to new and interesting problems although no synthesis or a fully coherent theory of policy has yet emerged from this research the results have already led to major revisions in views about the nature of the problems that policy has to deal with this paper provides a selective survey and discussion of son of the results of recent research with errhasis on their inplications for policy pentti j k kouri department of economics 269 mercer street second floor new york university new york n y 10003 macroeconomics of stagflation under flexible exchange rates

turning lights into flights estimating direct and indirect rebound effects for uk households energy efficiency improvements by households lead to rebound effects that offset the potential energy and emissions savings direct rebound effects result from increased demand for cheaper energy services while indirect rebound effects result from increased demand for other goods and services that also require energy to provide research to date has focused upon the former but both are important for climate change this study estimates the combined direct and indirect rebound effects from seven measures that improve the energy efficiency of uk dwellings the methodology is based upon estimates of the income elasticity and greenhouse gas ghg intensity of 16 categories of household goods and services and allows for the embodied emissions of the energy efficiency measures themselves as well as the capital cost of the measures rebound effects are measured in ghg terms and relate to the adoption of these measures by an average uk household the study finds that the rebound effects from these measures are typically in the range 5 15 and arise mostly from indirect effects this is largely because expenditure on gas and electricity is more ghg intensive than expenditure on other goods and services however the anticipated shift towards a low carbon electricity system in the uk may lead to much larger rebound effects

investigation into transmission options for cross border power trading in asean power grid this work is a feasibility study of high voltage ac hvac and high voltage dc hvdc transmission option for the association of southeast asian nations asean power grid apg interconnections an optimal power flow a minimum cost power generation model is developed in the matpower simulation platform to perform this analysis electricity generation and consumption data are taken from the latest power development plans of individual asean countries for the evaluation of optimal cross border power flow through the interconnections results show that apg can enhance power generation from countries with abundant renewable resources to meet the growing demand at load centers in the asean member nations an annual cost is used as the output matrix for this study the analysis results reveal that in some interconnections implementing hvdc link instead of currently planned hvac could be economically beneficial for the apg the findings in this paper would serve as valuable references for the apg planners

energy conservation more effective with rebound policy this article sketches the problem of indirect energy use effects also known as rebound of energy conservation there is widespread support for energy conservation especially when it is voluntary as this seems a cheap way to realize environmental and energy climate goals however this overlooks the phenomenon of rebound the topic of energy rebound has mainly attracted attention from energy analysts but has been surprisingly neglected in environmental economics even though economists generally are concerned with indirect or economy wide impacts of technical change and policies this paper presents definitions and interpretations of energy and environmental rebound as well as four fundamental reasons for the existence of the rebound phenomenon it further offers the most complete list of rebound pathways or mechanisms available in the literature in addition it discusses empirical estimates of rebound and addresses the implications of uncertainties and difficulties in assessing rebound suggestions are offered for strategies and public policies to contain rebound it is advised that rebound evaluation is an essential part of environmental policy and project assessments as opposed to earlier studies this paper stresses the relevance of the distinction between energy conservation resulting from autonomous demand changes and from efficiency improvements in technology equipment in addition it argues that rebound is especially relevant for developing countries

financing investment in the european electricity transmission network consequences on long term sustainability of the tsos financial structure this article focuses on the ability of european tsos to meet the demand for substantial investments in the electricity transmission grid over the next two decades we employ quantitative analysis to assess the impact of the required capital expenditures under a set of alternative financing strategies we consider a best case scenario of full cooperation between the european tsos it appears that under current trends in the evolution of transmission tariffs only half the volumes of investment currently planned could be funded a highly significant increase in transmission tariffs will be required to ensure the whole scale investments can be delivered finally alternative strategies can dampen the impact on tariffs but they can only partially substitute for this increase in charges paid by network users

investigating meso economic rebound effects production side effects and feedback loops between the micro and macro level abstract research on the rebound effect has so far mainly considered micro economic rebound effects at the level of consumers and households as well as macro economic rebound effects in the sense of energy efficiency induced economic growth effects this article focuses on an area of rebound research that has not yet received sufficient attention namely on meso economic rebound effects as production side and sector level rebounds the article summarizes and systematizes reasons why companies generate rebounds distinguishes market and sector level rebounds from macro economic growth effects identifies a number of feedback loops by which production side and sector level rebounds multiply or nullify consumer side rebound effects and finally discusses some conclusions on the potential quantitative dimension of production side rebound effects

perceptual and structural barriers to investing in natural capital economics from an ecological footprint perspective this paper argues that perceptual distortions and prevailing economic rationality far from encouraging investment in natural capital actually accelerate the depletion of natural capital stocks moreover conventional monetary analyses cannot detect the problem this paper therefore makes the case for direct biophysical measurement of relevant stocks and flows and uses for this purpose the ecological footprint concept to develop the argument the paper elaborates the natural capital concept and asserts the need of investing in natural capital to compensate for net losses it shows how the ecological footprint can be used as a biophysical measure for such capital and applies this concept as an analytical tool for examining the barriers to investing in natural capital it picks four issues from a rough taxonomy of barriers and discusses them from an ecological footprint perspective it shows why marginal prices cannot reflect ecological necessities how interregional risk pooling encourages resource liquidation how present terms of trade undermine both local and global ecological stability and how efficiency strategies may actually accelerate resource throughput affirming the necessity of biophysical approaches for exploring the sustainability implications of basic ecological and thermodynamic principles it draws lessons for current development

global warming and energy demand list of tables list of figures list of contributors preface 1 global warming and energy elasticities terry barker paul ekins and nick johnstonepart 1 estimating long term energy elasticities 2 alternative approaches to estimating long run energy demand elasticities an application to asian developing countries ron smith and m hashem pesaran 3 a survey of international energy elasticities neil manning and jago atkinson 4 long run demand elasticities for gasoline thomas sterner and mikael franzen 5 responses of energy demand in uk manufacturing to the energy price increases of 1973 and 1979 80 alan ingham 6 elasticities for oecd aggregate final energy demand lakis vouyoukas 7 modelling uk energy demand derek hodgson and keith millerpart ii energy the economy and greenhouse gas abatement 8 endogenous technological progress in fossil fuel demand laurence boone stephen hall david kemball cook and clare smith 9 uk energy price elasticities and their implications for long term co2 abatement terry barker 10 price elasticity and market structure overcoming obstacles to ensure energy efficiency tim jackson 11 rethinking the use of energy elasticities stefan p schleicher 12 revisiting the costs of co2 abatement paul ekins 13 asymmetrical price elasticities of energy demand michael grubb14 conclusions terry barker paul ekins and nick johnstone bibliography index

a biophysical analysis of the energy real gdp ratio implications for substitution and technical change abstract this paper quantifies the factors that caused the energy real gdp ratio to change during the post war period in france the federal republic of germany japan and the united kingdom econometric results indicate that changes in the types of fuel used changes in the energy consumed by the household sector changes in the types of goods and services produced and changes in energy prices account for most of the variation in this ratio price elasticities estimated from these results are lower than those estimated by neoclassical economists and indicate that the system boundaries used by neoclassical economists overestimate the amount of energy saved by substitution analysis of the error term from the regression results indicates that energy saving technical change has had little effect on the amount of energy used to support economic activity

an exploration in the theory of exchange rate regimes three exchange rate regimes a float a one sided peg and a cooperative peg are evaluated and compared in terms of efficiency and welfare levels the framework of analysis embodies country specific monies with the money of each country being used to transact in its commodity markets and its currency denominated bonds welfare levels depend only on consumption levels in the presence of perfect foresight all equilibrium allocations are pareto efficient in a floating exchange rate regime the perfect foresight equilibrium allocation coincides with an equilibrium of a costless barter economy the same result holds in a one sided peg if the pegging country s exchange rate stabilizing authority breaks even over time in a cooperative peg regime there is a different equilibrium allocation for each combination of exchange rate levels and monetary policies problems of policy coordination and conflicts in desired monetary policies are discussed

the imperfect price reversibility of non transport oil demand in the oecd abstract this paper examines the price reversibility of oecd non transport oil demand and its components residual heavy fuel oil non transport distillates and other non transport oil products our purpose is to determine the extent to which the reductions in demand following the oil price increases of the 1970s have been and will be reversed by the price cuts of the 1980s the analysis is based on an econometric model which utilizes price decomposition methods to measure separately the effects of price increases and price decreases these methods allow empirical testing of irreversibility and hysteresis and should be applicable in other areas of economics where asymmetry of response or persistence of effect are evident based on the statistical evidence we reject the conventional specification of demand being perfectly price reversible we conclude that the response to the price cuts of the 1980s has been significantly smaller than to the price increases of the 1970s demand has followed a ratchet process price increases reduced demand substantially when demanders conserved and switched away from oil but price cuts did not reverse this process completely if at all this has important implications for projections of oil demand especially under low price assumptions the oecd s dependency on oil will not increase as much as some analysts may have feared there is however another aspect of imperfect price reversibility the possibilities of adjusting to future price rises may not be as great as they have been in the past the easiest and least costly demand savings have already been made and oil has been replaced by other energy sources in many uses what s done is done

does predicted rebound depend on distinguishing between energy and energy services pour analyser le role des services energetiques et des combustibles dans l effet de relance de la consommation d energie liee a des actions d amelioration de l efficacite energetique plusieurs approches sont utilisees et comparees celle de cobb douglas celle de leontief et celle de la croissance equilibree

the impact of improved mileage on gasoline consumption a simple two equation model is presented of the short run derived demand for gasoline that incorporates both the effect of price and income on attained fuel efficiency and at the same time the effect of price income and attained fuel efficiency on miles traveled the results of this effort have provided 1 further evidence regarding the price and income elasticities of gasoline demand and more importantly 2 the first reported estimate of the short run mileage elasticity of gasoline demand these findings are important in determining appropriate and effective policies for reducing gasoline consumption in that they influence the relative effectiveness of such policies as excise taxes versus fuel efficiency standards 9 references 3 tables

the rebound effect on road freight transport empirical evidence from portugal abstract because a large proportion of total operating costs for transportation companies goes towards energy a reduction in energy operating costs brought about by an increase in fleet fuel efficiency or an increase in operational efficiency results in a change in the relative cost of road freight transportation this fact could result in an increase in the demand for such services if this is true the result would be an increase in total fuel consumption consequently that part of the energy savings obtained through the increased energy efficiency would be lost the existence of a rebound effect is especially important in the road freight transportation sector and is crucial for the definition of a national energy policy in this study data from the road freight transportation sector in portugal for the years of 1987 through 2006 was analyzed it was determined that an increase in energy efficiency did not cause a backfire but did cause a total direct rebound effect of 24 1 in addition fleet operators were more inclined to adopt operational efficiencies than technological fuel efficiencies as a means of increasing the total operational efficiency

estimating direct and indirect rebound effects for u s households with input output analysis part 2 simulation abstract this is the second part of a two part paper that integrates economic and industrial ecology methods to estimate the indirect rebound effect from residential energy efficiency investments we apply the model developed in part one to simulate the indirect rebound given an estimate of the direct rebound using a 2002 environmentally extended input output model and the 2004 consumer expenditure survey in 2002 for the u s we find an indirect rebound of 5 15 in primary energy and co 2 e emissions assuming a 10 direct rebound depending on the fuel saved with efficiency and household income the indirect rebound can be as high as 30 40 in no x or so 2 emissions for efficiency in natural gas services the substitution effect modeled in part one is small in most cases and we discuss appropriate applications for proportional or income elasticity spending assumptions large indirect rebound effects occur as the u s electric grid becomes less carbon intensive in households with large transportation demands or as energy prices increase even in extreme cases there is limited evidence for backfire or a rebound effect greater than 100 enacting pollution taxes or auctioned permits that internalize the externalities of energy use would ensure that rebound effects unambiguously increase consumers welfare

estimating direct and indirect rebound effects for u s households with input output analysis part 1 theoretical framework abstract this is the first part of a two part paper providing an analytical model of the indirect rebound effect given a direct rebound estimate that integrates consumer demand theory with the embodied energy of household spending from environmentally extended input output analysis the second part applies the model developed in part one to simulate the direct and indirect rebound for the average u s household in terms of primary energy co2e nox and so2 emissions and for energy efficiency investments in electricity natural gas or gasoline services part one provides a critical review of the largely independent economic and industrial ecology literatures on the indirect rebound by studying the two goods case and the n goods case we demonstrate that the indirect rebound is bounded by the consumer budget constraint and inversely related to the direct rebound we also compare the common proportional spending and income elasticity spending assumptions with our model of cross price elasticities including both substitution and income effects for the indirect rebound by assuming zero incremental capital costs and the same embodied energy as conventional technologies for efficient appliances we model an upper bound of the indirect rebound future work should also consider the increase in consumer welfare possible through the rebound effect

transmission expansion planning in electricity markets this paper presents a mixed integer linear programming lp formulation for the long term transmission expansion planning problem in a competitive pool based electricity market to achieve optimal expansion planning while modeling market functioning we define a number of scenarios based on the future demand in the system and we simulate the maximization of the aggregate social welfare investment and operating costs transmission losses and generator offers and demand bids are considered we propose to use a set of metrics to rate the effect of the expansion on the generators demands and the system as a whole the proposed model is applied to the garver six bus system and to the ieee 24 bus reliability test system simulation results can be interpreted in economic terms based on the values of the metrics obtained for different scenarios parameters and topologies

forward exchange rates in general equilibrium abstract this paper develops a two country overlapping generations model of an economy with a forward market in foreign exchange the equilibrium forward rate exhibits the conventional decomposition into the expected future spot rate a convexity term and a risk premium unlike partial equilibrium models however the model expresses these terms as functions of the primitive structural parameters of the economy it thus provides insights into the structure of the premium which may facilitate interpretation of empirical studies of the forward markets in particular it suggests that time varying risk premia may arise from changes in the distribution of wealth between countries over time

community renewable energy at a crossroads a think piece on degrowth technology and the democratization of the german energy system abstract degrowth activists and scholars have questioned society s current levels of material throughput and energy use the energy sector is at the core of any modern economy and germany serves as an international showcase for the transition of a large industrialized economy to a low carbon energy system diverse actors organizational models and technologies have contributed to the initiation of germany s energy transition through a wide range of community renewable energy projects the think piece investigates how far these diverse actors embrace the aims of the degrowth movement it also provides a critical account of on the ground realities through six hypotheses and contrasts them with claims made by the degrowth movement it is suggested that community renewable energy projects are at a crossroads while many projects have familiarized thousands of people with alternative economic models there is little evidence of a general change in attitudes towards technology consumption or equity in conclusion a major effort is needed to open initiatives to less affluent actors oppose recent trends of commodification and prevent community renewable energy projects from being engrossed by the dominant political and economic system

jevons paradox revisited the evidence for backfire from improved energy efficiency beginning with william stanley jevons in 1865 a number of authors have claimed that economically justified energy efficiency improvements will increase rather than reduce energy consumption jevons paradox is extremely difficult to test empirically but could have profound implications for energy and climate policy this paper summarises and critiques the arguments and evidence that have been cited in support of jevons paradox focusing in particular on the work of len brookes and harry saunders it identifies some empirical and theoretical weaknesses in these arguments highlights the questions they raise for economic orthodoxy and points to some interesting parallels between these arguments and those used by the biophysical school of ecological economics while the evidence in favour of jevons paradox is far from conclusive it does suggest that economy wide rebound effects are larger than is conventionally assumed and that energy plays a more important role in driving productivity improvements and economic growth than is conventionally assumed

empirical estimates of the direct rebound effect a review beginning with william stanley jevons in 1865 a number of authors have claimed that economically justified energy efficiency improvements will increase rather than reduce energy consumption jevons paradox is extremely difficult to test empirically but could have profound implications for energy and climate policy this paper summarises and critiques the arguments and evidence that have been cited in support of jevons paradox focusing in particular on the work of len brookes and harry saunders it identifies some empirical and theoretical weaknesses in these arguments highlights the questions they raise for economic orthodoxy and points to some interesting parallels between these arguments and those used by the biophysical school of ecological economics while the evidence in favour of jevons paradox is far from conclusive it does suggest that economy wide rebound effects are larger than is conventionally assumed and that energy plays a more important role in driving productivity improvements and economic growth than is conventionally assumed 2008 elsevier ltd all rights reserved

on the indeterminacy of equilibrium exchange rates in this paper we consider a particular international economic policy regime the laissez faire regime the distinguishing features of which are unrestricted portfolio choice and floating exchange rates and as we show this regime although favored by many economists is not economically feasible it does not have a determinate equilibrium that is an implication of an overlapping generations model more basically it is an implication of the notion that money is wanted only in order to accomplish trades

communication energy efficiency and economic fallacies abstract the sharpening energy efficiency debate has revived claims that the apparent savings from using more efficient technologies would be largely offset by the macroeconomic response the tendency to use more energy services because they are made cheaper when energy price or availability constrains demand this is correct in more normal circumstances it may be true for efficiency changes which occur as part of general economic trends but not for policy driven measures aimed at bringing more efficient technologies into imperfect markets in such cases there will usually be real net energy savings only slightly smaller than those suggested by a simple engineering analysis and clear economic benefits

self selection bias in the evaluation of voluntary energy conservation programs while voluntary energy conservation programs have been extensively promoted by electric utilities and public utility commissions their effectiveness has been insufficiently critiqued this paper contributes to the growing evaluation of such programs by measuring the net energy savings directly attributable to an actual set of programs the analysis explicitly corrects for the self selection bias that can arise in program evaluation the correction is found to be important traditional evaluation methods are subject to considerable bias correcting for this bias the amount of program induced energy savings is found to be considerably less than traditionally believed copyright 1988 by mit press

the use of the balance of payments as a shock absorber in fixed rate and managed float systems abstract this paper analyzes the use of the balance of payments as a shock absorber in fixed and managed exchange rate regimes the analysis is conducted in a monetary intergenerational model it shows that the balance of payments can be used to smooth consumption and raise the welfare of individuals the paper also justifies the stabilization of consumption as a policy goal achieved through the balance of payments mechanism

estimating the rebound effect in us manufacturing energy consumption abstract the energy price shocks of the 1970s are usually assumed to have increased the search for new energy saving technologies where eventual gains in energy efficiencies will reduce the real per unit price of energy services and hence the consumption of energy will rise and partially offset the initial reduction in the usage of energy sources this is the rebound effect which is estimated for the us manufacturing sector using time series data applying the dynamic ols method dols when allowing for asymmetric price effects the rebound effect is found to be approximately 24 for the us manufacturing sector

energy consumption for space heating a discrete continuous approach energy demand for space heating is estimated using a discrete continuous choice model which focuses on the relationship between the choice of heating equipment and energy consumption the model is estimated on norwegian micro data and the two stages of the model are estimated simultaneously the capital cost and the operating cost of the heating systems are both found to have a significant impact on the choice of heating system furthermore the results show that household characteristics are important variables in residential energy models energy price elasticities and income elasticities are also estimated

negative rebound and disinvestment effects in response to an improvement in energy efficiency in the uk economy this paper uses a computable general equilibrium cge framework to investigate the conditions under which rebound effects may occur in response to increases in energy efficiency in the uk national economy previous work for the uk has suggested that rebound effects will occur even where key elasticities of substitution in production are set close to zero the research reported in this paper involves carrying out a systematic sensitivity analysis where relative price sensitivity is gradually introduced into the system focusing specifically on elasticities of substitution in production and trade parameters in order to determine conditions under which rebound effects become a likely outcome the main result is that while there is positive pressure for rebound effects even where direct and indirect demands for energy are very price inelastic this may be partially or wholly offset by negative income competitiveness and disinvestment effects which also occur in response to falling energy prices the occurrence of disinvestment effects is of particular interest these occur where falling energy prices reduce profitability in domestic energy supply sectors leading to a contraction in capital stock in these sectors which may in turn lead to rebound effects that are smaller in the long run than in the short run a result that runs contrary to the predictions of previous theoretical work in this area

missing carbon reductions exploring rebound and backfire effects in uk households households are expected to play a pivotal role in reducing the uk s greenhouse gas ghg emissions and the uk government is encouraging specific household actions to help meet its targets however due to the rebound effect only a portion of the ghg emission reductions estimated by simple engineering calculations are generally achieved in practice for example replacing short car journeys by walking or cycling reduces consumption of motor fuels but this frees up money that may be spent on for example purchasing extra clothes or flying on vacation alternatively the money may be put into savings since all of these options lead to ghg emissions total ghg savings may be less than anticipated indeed in some instances emissions may increase a phenomenon known as backfire we estimate that the rebound effect for a combination of three abatement actions by uk households is approximately 34 targeting re spending on goods and services with a low ghg intensity reduces this to a minimum of around 12 while re spending on goods and services with a high ghg intensity leads to backfire our study highlights the importance of shifting consumption to lower ghg intensive categories and investing in low carbon investments

household adjustment to gasoline price change an analysis using 9 years of us survey data this paper examines the dynamics and composition of household adjustment to changes in the real price of gasoline using a panel of us households by decomposing the demand for gasoline into the demand for vehicle miles traveled and the demand for household composite miles per gallon we are able to add rich detail to the description of how households respond to gasoline price changes while obtaining total price elasticity estimates well within the range found in the literature we find that consumers initially respond to a price rise with a much larger decrease in consumption than would be indicated by the total elasticity in addition households respond to price changes by adjusting vehicle miles traveled more than composite miles per gallon in the year after a price change

a view from the macro side rebound backfire and khazzoom brookes abstract this paper attempts to delineate a few key insights extracted from theoretical macroeconomic considerations of the rebound issue the goal has been to reduce these thoughts to a clear set of assertions that if true would be useful points of reference in the ongoing discussion despite their non empirical nature

a market based transmission planning for hvdc grid case study of the north sea there is significant interest in building hvdc transmission to carry out transnational power exchange and deliver cheaper electricity from renewable energy sources which are located far from the load centers this paper presents a market based approach to solve a long term tep for meshed vsc hvdc grids that connect regional markets this is in general a nonlinear non convex large scale optimization problem with high computational burden partly due to the many combinations of wind and load that become possible we developed a two step iterative algorithm that first selects a subset of operating hours using a clustering technique and then seeks to maximize the social welfare of all regions and minimize the investment capital of transmission infrastructure subject to technical and economic constraints the outcome of the optimization is an optimal grid design with a topology and transmission capacities that results in congestion revenue paying off investment by the end the project s economic lifetime approximations are made to allow an analytical solution to the problem and demonstrate that an hvdc pricing mechanism can be consistent with an ac counterpart the model is used to investigate development of the offshore grid in the north sea simulation results are interpreted in economic terms and show the effectiveness of our proposed two step approach

on the rebound feedback between energy intensities and energy uses in iea countries abstract the interaction or feedback between energy efficiencies or energy intensities and energy use has long been the topic of debate some have argued that energy efficiency improvements by reducing energy intensities and therefore lowering the cost of energy services would lead to rebound effects offsetting much or all of any initial savings in energy in this paper we analyse historical data on energy use efficiency and pricing in different sectors to try and identify rebounds for the period of our data since about 1970 we show that key measures of activity car use manufacturing output and structure house area etc have changed little in response to changes in energy prices or efficiency instead continuing their long term evolution relative to gdp or other driving factors while our analysis cannot disentangle more macro level economic feedbacks in a detailed way we show indirectly that such effects also appear to have been small over the 1970s and 1980s overall our analysis of disaggregated sectoral and subsectoral energy use and activity trends in a variety of iea economies suggests that any feedback effect is small compared to both the effects on energy use of changes in energy intensities and overall economic growth we conclude that most of the improvements in energy efficiencies led to reductions in energy intensities observed in the 1970s and 1980s weighted by 1990 activity levels intensities were roughly 15 20 lower in 1994 5 than in 1973 which in turn meant real savings of energy energy demand in iea countries is roughly this much below what it would have been for the same gdp had these savings not occurred rebounds may have taken back some of the overall savings but most remain even after the fall of oil prices in 1986 any boost to gdp as a result of these savings could not have been sufficient to increase energy demand enough to significantly alter these conclusions that the savings remained after the fall in oil prices supports the notion that net savings restrained energy growth relative to gdp in some formulations arise from technological progress even if energy prices do not increase how far this effect can reach however is a matter of considerable debate

durable goods and residential demand for energy and water evidence from a field trial this article describes a household production model in which energy efficient durable goods cost less to operate so households may use them more the model is estimated using household level data from a field trial in which participants received high efficiency clothes washers free of charge the estimation strategy exploits this quasi random replacement of washers to derive precise estimates of the household production technology and a demand function for clothes washing during the field trial households increased clothes washing on average by 5 6 after receiving a high efficiency washer implying a price elasticity of 06 the complete model is used to evaluate the cost effectiveness of recent changes in minimum efficiency standards for clothes washers

fuel conserving and using production functions abstract this article compares eight production cost functions used or potentially useful for exploring how energy efficiency gains affect energy consumption we show the practitioner s choice of function can inadvertently pre determine results and make recommendations as to which functions are flexible enough to prevent this we also show pre selected factor substitution elasticities can similarly pre determine results to aid the comparison we decompose the energy consumption rebound effect into intensity and output income effects which also delivers insight into the mechanisms of rebound we conclude by recommending practitioners restrict themselves to either the gallant fourier or the generalized leontief symmetric generalized barnett cost functions as being sufficiently rebound flexible the translog cost function may be suitable given certain conditions and a particular form of the ces solow function is a possible but problematic candidate along the way the article provides a general methodology for similarly examining any arbitrarily defined constant returns to scale production or cost function

prices technology development and the rebound effect abstract energy efficiency is the critical parameter for policies that aim at reducing energy consumption while maintaining or even boosting economic growth the two main options to influence energy efficiency are changes in relative prices i e raising the price of energy through economic instruments or to introduce new technologies which increase the productivity of each unit of energy this paper is based on the notion that in an equilibrium economy the marginal economic productivity is identical for all factors i e energy labour knowledge and capital from this premise two main conclusions can be drawn first any change in price or technology will have an impact on the whole economy by creating feedbacks through the substitution of factors of production and goods as well as increased wealth second the two policy approaches changing relative prices and technology development are not opposite to each other they are the two faces of the same reality and should be developed and promoted simultaneously and consistently

short and long run electricity demand elasticities at the subsectoral level a cointegration analysis for german manufacturing industries in this paper we use multivariate cointegration analysis to estimate electricity demand elasticities at the subsectoral industry level this enables us to reap the benefits of lower heterogeneity within the electricity consuming sectors investigated and of retaining additional information otherwise blurred by aggregation the annual data set used covers eight subsectors of the german economy for the period 1970 2007 by employing a cointegrated var model specification and accounting for structural breaks we find cointegration relationships for five of the eight subsectors studied the long run elasticities range between 0 70 and 1 90 for economic activity and between 0 52 and zero for the price of electricity the short run elasticities are estimated by single equation error correction modeling and found to be between 0 17 to 1 02 for economic activity and 0 57 to zero for electricity price granger causality tests indicate that in the long term causality runs from both economic activity and electricity price to electricity consumption while granger causality from electricity price and electricity consumption to economic activity is detected in only two subsectors electricity price is found to be granger caused neither in the long nor the short run finally an impulse response analysis yields plausible results confirming the usefulness of the approach adopted

empirical analysis on energy rebound effect from the perspective of technological progress a case study of china s transport sector abstract energy rebound effect is a major issue in energy economics global energy and environmental problems have compelled the need for simultaneous attainment of economic development and energy conservation technological progress increases energy efficiency and saves energy but it also causes energy rebound effect which discounts the expected energy conservation china s transport sector is energy intensive therefore investigating rebound effect in china s transport sector has a very important significance for energy conservation and the formulation of related policies taking china s transport sector as a case study we used translog production function to measure the contribution rate of technological progress to output growth and estimated the rebound effect the results show that the average rebound effect was about 68 3 during 1981 2015 finally we provided relevant policy recommendations on the rebound effect based on the characteristics of energy use in china s transport sector

supply elasticity matters for the rebound effect and its impact on policy comparisons abstract we develop a model of the rebound effect which explicitly accounts for both the demand and supply sides of the energy sources we consider a transportation sector originally using a dirty fossil fuel and examine the relative effectiveness of alternative policies efficiency improvements in the dirty fuel technology sector e g cafe standards and technology shifts by partial adoption of a new clean technology e g low carbon fuel standards the model generates endogenous equilibrium quantities and prices for the dirty and clean fuels we characterize the magnitude of the rebound effect as a function of demand and supply elasticities and use the equilibrium values to compare policy options when the supply of the dirty fuel is inelastic we find that introducing a new technology with non zero emissions may actually increase the total level of emissions similar to the leakage effect a technology shift policy can perform better than an efficiency improvement policy in the dirty fuel sector only when the dirty fuel supply is sufficiently elastic the emission intensity of the new technology very low and the technology shift is greater than a threshold value using data for gasoline as a proxy for the dirty technology and several other cleaner technologies we show that these conditions are satisfied by a hypothetical zero emission technology but not by electric vehicles using the average us generation mix or the current us corn based e85 our results demonstrate the importance of accounting for the supply side in estimating the magnitude of the rebound effect and its impact on fuel consumption in a large scale policy implementation

the rebound effect some empirical evidence from india abstract the present paper looks at the effect of technical efficiency gains on energy use in three sectors in india at varying levels of aggregation high positive rebound implies that efficient technology unless supplemented by appropriate pricing policy will not be successful in containing demand however the main purpose of the paper is to focus on the unique mechanism of rebound that may occur in developing countries with unmet demand

a new strategy for transmission expansion in competitive electricity markets it will be important to develop a transmission network capable of handling future generation and load patterns in a deregulated unbundled and competitive electricity market a new strategy for transmission expansion under a competitive market environment is therefore presented in this paper in the proposed strategy a new transmission planning model is developed to consider a variety of market driven power flow patterns while a decision analysis scheme is incorporated to minimize the risk of the selected plan numerical examples are given to illustrate the potential of the proposed strategy to make a significant contribution to transmission planning in competitive markets

the greenhouse effect the fallacies in the energy efficiency solution abstract the view that widespread improvements in energy efficiency can by themselves do anything to halt the build up of greenhouse gases around the globe is fundamentally unsound it is based on the same fallacies that underlie the claim that energy savings from improving efficiency can substitute for new energy supply the paper by keepin and kats1 claiming that per tonne of coal not burned improvements in energy efficiency are more cost effective than substituting nuclear for coal fired power is therefore an irrelevancy as far as this debate is concerned reductions is energy intensity of output that are not damaging to the economy are associated with increases not decreases in energy demand at the macroeconomic level even within the boundaries of their own flawed approach their attempt2 to refute the critique of their thesis made by jones3 was little more than misdirected grape shot with no discernable connected thread of argument

dynamics of a floating exchange rate regime we study the full equilibrium dynamics of a two country world economy with a floating exchange rate traded and nontraded goods and explicit modeling of the use of money the resulting exchange rate equation depends on several details of the economic structure such as the supply structure and propensities to spend on various goods although real exchange rate movements have the usual association with the current account the ordinary exchange rate may appreciate or depreciate when there are deficits on current account even when the quantities of money do not change deviations from purchasing power parity and the fisher equation are shown to be the rule rather than the exception

transitions to sustainable consumption and production in cities this special volume focuses on sustainable production and consumption and especially on transformation processes in the built environment more than 50 and rising of the world population is now living in cities that are both centers of technological and social innovations in sustainable life styles and carriers of unsustainable lifestyles in this special volume contributions can be found on grassroots innovations sharing food energy and waste systems associated with cities the role of corporations in realizing transitions towards sustainable living consumer activism behavioral change and consumer values in driving change and on governance and indicators for measuring all such transformations many of the papers were presented at the second conference of the global research forum on sustainable production and consumption grf spac in shanghai in june 2014 and thus a substantial number of them report on research on sustainable production and consumption in cities in china the authorship also reflects growing collaboration between researchers from developing and industrialized countries the great diversity of contributions on the topic reflects the wealth of insights generated on the topic in recent years but also the need for a better understanding of change processes at the intersection of social and physical systems and at multiple levels of action

currency substitution in a production economy abstract this paper examines a small open economy with endogenous employment using an intergenerational model under floating rates risk averse workers enhance their welfare through currency substitution workers currency substitution behavior produces a phillips curve with anticipated exchange rate movement and domestic inflationary expectation as explanatory variables the dependence of the level of equilibrium employment on the terms of trade is demonstrated finally the association between exchange rates and current accounts is examined in relation to the role of money

distributional effects of alternative vehicle pollution control policies abstract previous work shows that policies that subsidize new vehicles and tax size miles or gasoline efficiently reduce pollution less is known about their distributional effects this paper examines distributional effects by estimating the joint demand for vehicles and miles using the consumer expenditure survey greater price responsiveness among low income households enhances progressivity of gas or miles taxes across lower incomes and mitigates regressivity across upper incomes taxes on engine size or subsidies to new vehicles are significantly more regressive than gas or miles taxes

energy efficiency fallacies revisited abstract a number of governments including that of the uk subscribe to the belief that a national program devoted to raising energy efficiency throughout the economy provides a costless indeed profitable route to meeting international environmental obligations this is a seductive policy it constitutes the proverbial free lunch not only avoiding politically unpopular measures like outlawing taxing or rationing offending fuels or expanding non carboniferous sources of energy like nuclear power but doing so with economic benefit the author of this contribution came to doubt the validity of this solution when it was offered as a way of mitigating the effect of the opec price hikes of the 1970 maintaining that economically justified improvement in energy efficiency led to higher levels of energy consumption at the economy wide level than in the absence of any efficiency response more fundamentally he argues that there is no case for preferentially singling out energy from among all the resources available to us for efficiency maximization the least damaging policy is to determine targets enact the restrictive measures needed to curb consumption and then leave it to consumers intermediate and final to reallocate all the resources available to them to best effect subject to the new enacted constraints and any others they might be experiencing there is no reason to suppose that it is right for all the economic adjustment following a new resource constraint to take the form of improvements in the productivity of that resource alone as many others have argued any action to impose resource constraint entails an inevitable economic cost in the shape of a reduction in production and consumption possibilities there would be no free lunch in the last few years debate about the validity of these contentions has blossomed especially under the influence of writers on the western side of the atlantic in this contribution the author outlines the original arguments for questioning whether raised efficiency leads to lower consumption reports more recent developments and offers some insights as food for further thought