Digitalization as a trigger for a rebound effect of electricity use

Abstract

Digitalization has the potential to trigger energy consumption rebounds, while its size has often been disregarded. Using panel data from 283 Chinese cities during 2004–2019, this study adopts a panel smooth transfer regression (PSTR) to estimate the rebound effect of electricity use induced by digitalization from its composite index and sub-dimensions and identifies the individual differences and time-varying trends in the rebound effect. The findings indicate that digitalization has an inverted U-shaped influence on the rebound effect of electricity use, with the maximum increase in the rebound effect reaching 19 % and stabilizing at approximately 13 %. Second, in terms of the sub-dimensions, Internet connectivity and digital output, cause the larger increases in rebound effects compared with digital technology. Third, the average digitalization-induced rebound effect in cities with high levels of digitalization, such as Beijing and Shanghai, is slightly lower than that in cities with medium levels of digitalization. Lishui, Chaozhou, and Taizhou have the largest digitalization-induced rebound effects on electricity use, reaching approximately 18 % on average. Finally, the digitalization-induced rebound effect on electricity use in most provinces generally tends to increase over time. This study provides policy implications for reducing the energy rebound effects triggered by digitization and promoting the development of digitalization and greening.