A general equilibrium assessment of rebound effects

In this paper we use a general equilibrium model applied to a national economy (Norway) to explore the potential for energy efficiency improvements to trigger economic forces that offset potential savings from using more efficient technologies (rebound effects). Two types of energy efficiency improvements (electricity and oil) are introduced into various sectors of the economy. Our results suggest significant and surprising differences across sectors concerning both energy use and consequences for the build-up of greenhouse gases. Rebound effects are found to be quite significant for manufacturing sectors since long-term consumption of energy undergoes minor reductions or increases in response to efficiency improvements. In other sectors, rebound effects appear to be weak or almost absent. (C) 2003 Elsevier B.V. All rights reserved.