Making the case for supporting broad energy efficiency programmes: impacts on household incomes and other economic benefits

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Abstract

In recent years, an overly narrow focus on rebound effects has limited the extent of researcher and policy attention afforded to the wider multiple benefits of increased energy efficiency. The objective of this paper is to focus policy attention on the sustained added value to the economy that is created as result of improving energy efficiency in the residential sector. Governments around the world are committed to increasing energy efficiency more generally, but often focus public support in low income households where energy poverty is a particular concern. However, governments operate in a context of multiple objectives where energy efficiency is expected to deliver significant reductions in carbon emissions alongside sustainable economic development. We use a UK CGE model to consider the general effects of supporting increases in energy efficiency in residential energy use. Our results demonstrate that the increase in GDP, and economic activity more generally, triggered by increased energy efficiency delivers more in terms of increased household incomes than the efficiency improvement itself. We find that the more wide ranging the boost to energy efficiency, the greater the economic expansion and associated returns are likely to be, and the less the means of financing through public budgets will erode the benefits over time.
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Original languageEnglish
Publication statusPublished - 30 Jun 2017
Event23rd Annual Conference of the European Association of Environmental and Resource Economists - Megaron Athens International Conference Centre, Athens, Greece
Duration: 28 Jun 20171 Jul 2017

Conference

Conference23rd Annual Conference of the European Association of Environmental and Resource Economists
CountryGreece
CityAthens
Period28/06/171/07/17

Keywords

  • energy efficiency
  • energy demand
  • fuel poverty
  • general equilibrium model
  • rebound effects

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