Abstract
This article presents a stepwise, refined, and practical analytical framework to model the microeconomic environmental rebound effect (ERE) stemming from cost differences of electric cars in terms of changes in multiple life cycle environmental indicators. The analytical framework is based on marginal consumption analysis and hybrid life cycle assessment (LCA). The article makes a novel contribution through a reinterpretation of the traditional rebound effect and methodological refinements. It also provides novel empirical results about the ERE for plug-in hybrid electric (PHE), full-battery electric (FBE), and hydrogen fuel cell (HFC) cars for Europe. The ERE is found to have a remarkable impact on product-level environmental scores. For the PHE car, the ERE causes a marginal increase in demand and environmental pressures due to a small decrease in the cost of using this technology. For FBE and HFC cars, the high capital costs cause a noteworthy decrease in environmental pressures for some indicators (negative rebound effect). The results corroborate the concern over the high influence of cost differences for environmental assessment, and they prompt sustainable consumption policies to consider markets and prices as tools rather than as an immutable background.
Highlights
Governments have actively pursued environmental policies for much of the late twentieth century
It extends the rebound effect literature in four important ways; i. It incorporates the potential for variation with income levels for indirect effects, ii. it enables the isolation of direct and indirect effects for particular cases to examine the relationship between the two, iii. it expands the scope of rebound effect analysis to include taxes and subsidies, and iv. it relates the theories and empirical evidence of the rebound effect literature to the politically dominant environmental Kuznets curve hypothesis. These outcomes are achieved in the process of answering one simple question –to what extent do rebound effects offset the benefits of win-win demand side approaches for reducing greenhouse gas emissions? Such win-win approaches are those for which both environmental and economic gains are reported to coexist and include, amongst other actions, voluntary conservation measures in the form of consumption pattern changes and the adoption of energy efficient alternatives for households
DSL2 model shows the least variation with income level, which is to be expected when using five non-income explanatory variables
Summary
The emerging rebound effect literature is devoid of a solid theoretical basis with supporting empirical estimates. The thesis pays particular attention to voluntary consumption pattern changes and environmental taxes and subsidies, and uses series of case studies to estimate the magnitude of rebound effects It extends the rebound effect literature in four important ways;. It relates the theories and empirical evidence of the rebound effect literature to the politically dominant environmental Kuznets curve hypothesis These outcomes are achieved in the process of answering one simple question –to what extent do rebound effects offset the benefits of win-win demand side approaches for reducing greenhouse gas emissions? Such win-win approaches are those for which both environmental and economic gains are reported to coexist and include, amongst other actions, voluntary conservation measures in the form of consumption pattern changes and the adoption of energy efficient alternatives for households To attempt this task with validity, further detailed questions are addressed, in particular: How does household income level impact the magnitude of rebound effects?.
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