Estimating direct and indirect rebound effects by supply-driven input-output model: A case study of Taiwan's industry

Abstract

Most existing literature focuses on the direct rebound effect on the demand side for consumers. This study analyses direct and indirect rebound effects in Taiwan's industry from the perspective of producers. However, most studies on the producers' viewpoint may overlook inter-industry linkages. This study applies a supply-driven input-output model to quantify the magnitude of rebound effects by explicitly considering inter-industry linkages.Empirical results showed that total rebound effects for most Taiwan's sectors were less than 10% in 2011. A comparison among the sectors yields that sectors with lower energy efficiency had higher direct rebound effects, while sectors with higher forward linkages generated higher indirect rebound effects. Taking the Mining sector (S3) as an example, which is an upstream supplier and has high forward linkages; it showed high indirect rebound effects that are derived from the accumulation of additional energy consumption by its downstream producers.The findings also showed that in almost all sectors, indirect rebound effects were higher than direct rebound effects. In other words, if indirect rebound effects are neglected, the total rebound effects will be underestimated. Hence, the energy-saving potential may be overestimated.