The effectiveness of energy efficiency improvement in a developing country: Rebound effect of residential electricity use in South Korea

Abstract

The government of South Korea considers an energy efficiency improvement policy an effective economic measure for climate change like many other governments. But it is unaware of any ‘rebound effect’, the unexpected result of energy efficiency improvement. So the rebound effect of residential electricity use in South Korea was estimated using two different scales in this paper. At the macro level, the rebound effect was estimated indirectly by using price elasticity, and at the micro level, the rebound effect of individual home appliances was estimated directly by using a non-linear relationship between energy efficiency and energy use. At the macro level, the long- and short-term results of rebound effect were estimated at 30% and 38%, respectively. Also at the micro level, the rebound effect of air conditioners was 57–70%; while refrigerators showed only a composite of rebound and income effects. Finally, there was no backfire effect, and efficiency improvement brought energy reduction. In conclusion, these suggest that rebound effect is an important factor that the government of South Korea must consider when planning its energy efficiency improvement policy.