Towards energy conservation by improving energy efficiency? Evidence from China’s metallurgical industry

Abstract

Traditionally, improving the energy efficiency is considered to be essential to energy saving. However, it may not be as effective as expected due to the rebound effect. Focusing on China’s metallurgical industry, this study is targeted to measure the energy rebound effect and investigate whether improving energy efficiency can promote energy saving. A dynamic energy efficiency index, which can take both technological progress and energy utilization efficiency into account is first calculated. Then, the energy rebound effect of China’s metallurgical industry from the substitution and output channels is measured, and a better understanding of the energy rebound effect is thus provided. Finally, the influence of energy rebound effect on energy conservation potential is explored. Three main findings are obtained: First, the rebound effect through the substitution channel and output channel in the metallurgical industry are 12.34% and 25.4%, respectively. Second, the energy rebound effect in Eastern China is the largest, followed by Central and Western China. Third, the physical quantities of energy being offset by the rebound effect in China’s metallurgical industry are estimated to be 275.7 million tons of standard coal. These results demonstrate that additional measures should be taken in conjunction with energy efficiency improvement policies.