Multiplier Analysis of Re-spending Rebound Effects: Research Briefing 02

This briefing focuses on a particular type of rebound effect, which results from re-spending decisions as households realise savings due to reduced energy requirements. Measuring rebound from re-spending involves identifying changes in emissions-relevant energy use embodied in the supply chains of different goods/services that households may switch consumption between as their energy requirements are reduced In assessing re-spending options, we consider a carbon saving multiplier (CSM). This measures the change in embodied supply chain emissions per kilotonne (kt) directly saved by UK households. A key aim of policy will then be to limit the erosion of this multiplier value. Our central finding is that upward rebound effects in supply chains supporting re-spending decisions erode carbon saving multiplier effects of reduced energy spending. There may also be important effects in terms of increased emissions overseas (carbon leakage) because non-energy supply chains tend to be more international than energy supply chains.