Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/198910 
Year of Publication: 
2019
Series/Report no.: 
CESifo Working Paper No. 7550
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Improvements in energy efficiency can reduce costs of consuming services from cars and appliances and result in positive rebound that offsets part of the direct energy reduction. Our analytical general equilibrium model decomposes rebound into direct and indirect effects. A costless technology shock has positive rebound as in prior literature, but a pre-existing energy efficiency standard can negate direct energy savings from that shock. For increased stringency of energy efficiency standards, however, we show how income effects reduce energy use for both services and other goods. We show exactly when those increased costs imply negative total rebound.
JEL: 
Q48
Document Type: 
Working Paper
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