The Added Value from a General Equilibrium Analyses of Increased Efficiency in Household Energy Use

Research output: Working paperDiscussion paper

Abstract

The aim of the paper is to identify the added value from using general equilibrium techniques to consider the economy-wide impacts of increased efficiency in household energy use. We take as an illustrative case study the effect of a 5% improvement in household energy efficiency on the UK economy. This impact is measured through simulations that use models that have increasing degrees of endogeneity but are calibrated on a common data set. That is to say, we calculate rebound effects for models that progress from the most basic partial equilibrium approach to a fully specified general equilibrium treatment. The size of the rebound effect on total energy use depends upon: the elasticity of substitution of energy in household consumption; the energy intensity of the different elements of household consumption demand; and the impact of changes in income, economic activity and relative prices. A general equilibrium model is required to capture these final three impacts.
LanguageEnglish
Place of PublicationGlasgow
PublisherUniversity of Strathclyde
Pages1-51
Number of pages52
Volume13
Publication statusPublished - May 2013

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General equilibrium
Energy use
Household
Added value
Household consumption
Rebound effect
Energy efficiency
Simulation
Income
Endogeneity
Elasticity of substitution
Partial equilibrium
Energy intensity
Relative prices
Economic activity
Energy
General equilibrium model

Keywords

  • energy efficiency
  • indirect rebound effects
  • economy-wide rebound effects
  • household energy consumption
  • cge models

Cite this

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title = "The Added Value from a General Equilibrium Analyses of Increased Efficiency in Household Energy Use",
abstract = "The aim of the paper is to identify the added value from using general equilibrium techniques to consider the economy-wide impacts of increased efficiency in household energy use. We take as an illustrative case study the effect of a 5{\%} improvement in household energy efficiency on the UK economy. This impact is measured through simulations that use models that have increasing degrees of endogeneity but are calibrated on a common data set. That is to say, we calculate rebound effects for models that progress from the most basic partial equilibrium approach to a fully specified general equilibrium treatment. The size of the rebound effect on total energy use depends upon: the elasticity of substitution of energy in household consumption; the energy intensity of the different elements of household consumption demand; and the impact of changes in income, economic activity and relative prices. A general equilibrium model is required to capture these final three impacts.",
keywords = "energy efficiency, indirect rebound effects, economy-wide rebound effects, household energy consumption, cge models",
author = "Patrizio Lecca and Peter McGregor and Swales, {J. Kim} and Karen Turner",
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The Added Value from a General Equilibrium Analyses of Increased Efficiency in Household Energy Use. / Lecca, Patrizio; McGregor, Peter; Swales, J. Kim; Turner, Karen.

08. ed. Glasgow : University of Strathclyde, 2013. p. 1-51.

Research output: Working paperDiscussion paper

TY - UNPB

T1 - The Added Value from a General Equilibrium Analyses of Increased Efficiency in Household Energy Use

AU - Lecca, Patrizio

AU - McGregor, Peter

AU - Swales, J. Kim

AU - Turner, Karen

N1 - Published as a paper within the Discussion Papers in Economics, No. 13-08 (2013)

PY - 2013/5

Y1 - 2013/5

N2 - The aim of the paper is to identify the added value from using general equilibrium techniques to consider the economy-wide impacts of increased efficiency in household energy use. We take as an illustrative case study the effect of a 5% improvement in household energy efficiency on the UK economy. This impact is measured through simulations that use models that have increasing degrees of endogeneity but are calibrated on a common data set. That is to say, we calculate rebound effects for models that progress from the most basic partial equilibrium approach to a fully specified general equilibrium treatment. The size of the rebound effect on total energy use depends upon: the elasticity of substitution of energy in household consumption; the energy intensity of the different elements of household consumption demand; and the impact of changes in income, economic activity and relative prices. A general equilibrium model is required to capture these final three impacts.

AB - The aim of the paper is to identify the added value from using general equilibrium techniques to consider the economy-wide impacts of increased efficiency in household energy use. We take as an illustrative case study the effect of a 5% improvement in household energy efficiency on the UK economy. This impact is measured through simulations that use models that have increasing degrees of endogeneity but are calibrated on a common data set. That is to say, we calculate rebound effects for models that progress from the most basic partial equilibrium approach to a fully specified general equilibrium treatment. The size of the rebound effect on total energy use depends upon: the elasticity of substitution of energy in household consumption; the energy intensity of the different elements of household consumption demand; and the impact of changes in income, economic activity and relative prices. A general equilibrium model is required to capture these final three impacts.

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KW - indirect rebound effects

KW - economy-wide rebound effects

KW - household energy consumption

KW - cge models

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BT - The Added Value from a General Equilibrium Analyses of Increased Efficiency in Household Energy Use

PB - University of Strathclyde

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