Energy Efficiency, Rebound Effects and the Environmental Kuznets Curve

Citation

Turner K & Hanley N (2010) Energy Efficiency, Rebound Effects and the Environmental Kuznets Curve. Stirling Economics Discussion Paper, 2010-17.

Abstract
Technological change is one factor used to justify the existence of an Environmental Kuznets Curve, and technological improvements have been argued to be a key factor in mitigating the impacts of economic growth on environmental quality. In this paper we use a CGE model of the Scottish economy to consider the factors influencing the impacts of one form of technological change - improvements in energy efficiency - on absolute levels of CO2 emissions, on the carbon intensity of the economy (CO2 emissions relative to real GDP), and the per capita EKC relationship. These factors include the elasticity of substitution between energy and non-energy inputs, responses in the labour market and the structure of the economy. Our results demonstrate the key role played by the general equilibrium price elasticity of demand for energy, and the relative influence of different factors on this parameter.

Keywords
computable general equilibrium models; technical progress; energy efficiency; rebound effects; Environmental Kuznets Curve; Environmental economics; Cost effectiveness

JEL codes

• Q40: Energy: General
• Q54: Climate; Natural Disasters and Their Management; Global Warming
• Q56: Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth