Analysis of the rebound effects of fossil and nonfossil energy in China based on sustainable development

Although the rebound effect caused by technological progress has been widely accepted, few studies have estimated and compared the rebound effects of fossil and nonfossil energy separately, because fossil and nonfossil energy consumption have different effects on sustainable development. We use the data envelopment analysis-Malmquist index, logarithmic mean Divisia index, and Jacobian matrix methods to estimate and compare the rebound effects of China's fossil and nonfossil energy during 2006-2014. Empirical results show that nonfossil energy had a higher rebound effect than fossil energy and that technological progress was helpful in decreasing the proportion of fossil energy consumption. Furthermore, we found that technological progress contributed to increases in the relative price of fossil energy, causing nonfossil energy to be more favored. Simultaneously, nonfossil energy produced a substitution effect on fossil energy over the long term. On the basis of the empirical analysis, we also present some environmental policy implications.