A critique of Saunders' ‘historical evidence for energy efficiency rebound in 30 us sectors’

Abstract

A recent article in Technological Forecasting & Social Change presents a calculation of historical rebound effects in thirty sectors of the United States economy over the period 1960–2005 (Saunders 2013). Here, we show that the empirical data set used to generate those findings—a prominent input–output data set developed by Jorgenson (2007)—is not appropriate for the use to which Saunders puts it. Saunders' model requires annual data on the price and quantity of energy consumed by each sector; however, the Jorgenson data are inferred from national prices, not prices observed at the sector level and disaggregated by geographic region. Furthermore, Jorgenson reports average prices, rather than marginal prices; yet the rebound effect is caused by changes in marginal price of energy services. We compare the differences between national prices and sector-specific prices across geographic regions in the United States, demonstrating that Saunders' use of national average energy prices is inappropriate for investigating the rebound effect.