Rebound Effects for Household Energy Services in the UK

Abstract

This study estimates the combined direct and indirect rebound effects from energy efficiency improvements in the delivery of six energy services to UK households, namely: heating; lighting; cooking; refrigeration and clothes washing; entertainment and computing; and private vehicle travel. We use a unique database on the price and quantity demanded of these energy services over the past half century. We estimate a two-stage almost ideal demand system for household expenditure, using these energy services as expenditure categories. We estimate rebound effects in terms of carbon emissions and only include the ‘direct’ emissions associated with energy consumption. Our results suggest direct rebound effects of 70% for heating, 54% for private vehicle travel and ∼90% for the other energy services. However, these effects are offset by negative indirect rebound effects—that is, indirect rebounds contribute additional emission savings. As a result, our estimates of combined rebound effects are generally smaller, namely 54% for lighting, 55% for heating, 41% for refrigeration and clothes washing, -12% for entertainment and computing, 44% for cooking and 69% for vehicle travel. We also find some evidence that rebound effects have declined over time. We provide some important caveats to these results, and indicate priorities for future research.