Decomposition of Rebound Effect in Iran: The Approach of Computable General Equilibrium

Document Type : Original Article

Authors

1 Ph.D Candidate in Economics, Faculty of Economics, Allameh Tabataba'i University, Tehran, Iran

2 Associate Professor of Economics, Faculty of Economics, Allameh Tabataba'i University, Tehran, Iran

10.29252/ecoj.10.3.99

Abstract

One way to reduce energy consumption is to improve energy efficiency in various economic activities. But energy savings may be limited by the rebound effects. One of the challenges in calculating the rebound effects is the decomposition of the rebound effects to the direct rebound effects and the rebound effects across the economy so that the effect of increasing efficiency can be distinguished directly and considering all market adaptations. The purpose of this paper is to provide a theoretical model for the analysis of rebound effects and its calculation in different activities using the general equilibrium model. Based on the results of the modeling and using the data of the Social Accounting Matrix in 2011, the direct rebound effect by 1% increasing the efficiency of electricity and fossil fuels is 90.1% and 72.8%, respectively. The economy wide effect is not much different from the direct effect as households do not react much to the increase in efficiency in this sector due to the low share of energy costs from household expenditures. Is. The high rebound effect observed in the Iranian economy will limit the effectiveness of the policy of increasing efficiency on reducing energy consumption.

Keywords

References

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Journal of Economics and Modelling
Volume 10, Issue 3 - Serial Number 39
December 2019
Pages 85-109

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