The economy-wide rebound effect from improved energy efficiency in Swedish industries-A general equilibrium analysis

The objective of this paper is to analyse the rebound effect from increased efficiency in industrial energy use in Sweden. Energy efficiency improvements can have significant micro- and macroeconomic effects that hamper the positive effect on real energy savings. To assess the size of the overall rebound effect in the Swedish economy, we apply a computable general equilibrium model. The results show that the economy-wide rebound effect depends on a number of factors, e.g. the extent of the energy efficiency improvement, how the labour market is modelled as well as whether the increase in energy efficiency is combined with a cost or not. We find that the rebound effect following a five per cent increase in energy efficiency in the Swedish industry lies in the 40-70 per cent range. When energy efficiency is only improved in energy-intensive production, the rebound effect becomes even higher. These findings are in line with the results in the literature. (C) 2015 Elsevier Ltd. All rights reserved.