Estimating the Rebound Effect of the U.S. Road Freight Transport

Abstract

The United States (U.S.) road freight sector has continued to grow over recent decades. Growth in road freight could result in more fuel consumption and hence increased greenhouse gas emissions. Policymakers have attempted to manage the growth of energy usage through improved fuel economy based on technological advances. However, such improvements may not lead to anticipated goals because of the rebound effect, where improvements in energy efficiency trigger more travel and energy consumption that offsets energy savings. Thus, this study aims to determine the potential rebound effect from improved energy efficiency in the U.S. road freight sector. Eight fuel cost models are applied and asymmetric price response is incorporated in estimating the U.S. road freight sector’s rebound effect from 1980 to 2016. In addition, a recently developed data envelopment analysis is applied to determine the annual rebound effect in the road freight sector. The results suggest that, after accounting for the asymmetric price response, the average rebound effect of the U.S. road freight sector ranges from 6.9% to 8.8%, a level considerably less than that found for several industrialized countries and emerging economies. However, a considerable increase in the rebound effect has been seen in more recent years. The findings suggest that overlooking the rebound effect in environmental policies could impede the goal of reducing total energy consumption and accompanying emissions. Policymakers should incorporate the rebound effect from efficiency enhancement in policy development and utilize some potential programs to reduce the adverse influence of rebound effect in related policies.