Evaluating the direct rebound effect of China’s urban household energy demand

Abstract

Improving energy efficiency is the primary way to achieve the objective of energy policies. The size of rebound effect determines to what extent improvements on energy efficiency can achieve the intended goals. Therefore, measuring the rebound effect will play an important role in formulating a nation’s energy policy. Based on the panel data of 29 provinces in China during 1996-2014, and using the price elasticity of energy demand as a proxy variable, this study applied the error correction model to measure the long-term and short-term direct rebound effect of urban household energy use in China. The difference in rebound effects among different regions was also analyzed. The results show that the direct rebound effect of urban household energy use in China is 45% in the long term and 20% in the short term. In this perspective, the past energy efficiency improvement policies are effective. As for different regions, the direct rebound effects of urban household energy use in Eastern, Central and Western regions are 46%, 26% and 89%in the long term, 35%, 17% and 78% in the short term respectively. Therefore, energy efficiency policies should be firstly implemented in the Central provinces that are with relatively small rebound effects.