Energy Efficiency as an Instrument of Regional Development Policy? Trading-off the Benefits of an Economic Stimulus and Energy Rebound Effects

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Abstract

Previous studies show that improving efficiency in household energy use can stimulate a national economy through an increase and change in the pattern of the aggregate demand. However, this may impact competitiveness. Here we find that in an open region, interregional migration of workers may give additional momentum to the economic expansion, by relieving pressure on the real wage and the CPI. Furthermore, the stimulus will be further enhanced by the greater fiscal autonomy that Scotland is set shortly to enjoy. By considering a range of CGE simulation scenarios we show that there is a tension between the economic stimulus from energy efficiency and the scale of rebound effects. However, we also show that household energy efficiency increases do typically generate a “double dividend” of increased regional economic activity and a reduction in carbon emissions.
Original languageEnglish
Place of PublicationGlasgow
PublisherUniversity of Strathclyde
Pages1-43
Number of pages43
Volume17
Publication statusPublished - 28 Feb 2017

Publication series

NameStrathclyde Discussion Papers in Economics
PublisherUniversity of Strathclyde
Volume17.02

Keywords

  • energy efficiency
  • regional development policy
  • energy rebound
  • regional fiscal autonomy
  • general equilibrium
  • CGE simulation
  • rebound effects

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    Figus, G., Lecca, P., McGregor, P., & Turner, K. (2017). Energy Efficiency as an Instrument of Regional Development Policy? Trading-off the Benefits of an Economic Stimulus and Energy Rebound Effects. (pp. 1-43). (Strathclyde Discussion Papers in Economics; Vol. 17.02). Glasgow: University of Strathclyde.