Macroeconomic Time-Series Evidence that Energy Efficiency Improvements Do not Save Energy

35 Pages Posted: 19 Feb 2019

See all articles by Stephan Bruns

Stephan Bruns

Department of Economics, University of Göttingen

Alessio Moneta

Institute of Economics, Sant'Anna School of Advanced Studies

David I. Stern

Australian National University (ANU) - Crawford School of Public Policy

Date Written: February 17, 2019

Abstract

The size of the economy-wide rebound effect is crucial for estimating the contribution that energy efficiency improvements can make to reducing energy use and greenhouse gas emissions. We provide the first empirical general equilibrium estimate of the economy-wide rebound effect. We use a structural vector autoregressive (SVAR) model that is estimated using search methods developed in machine learning. We apply the SVAR to U.S. monthly and quarterly data, finding that after four years rebound is around 100%. This implies that policies to encourage cost-reducing energy efficiency innovation are not likely to significantly reduce energy use and greenhouse gas emissions.

JEL Classification: C32, Q43

Suggested Citation

Bruns, Stephan and Moneta, Alessio and Stern, David I., Macroeconomic Time-Series Evidence that Energy Efficiency Improvements Do not Save Energy (February 17, 2019). CAMA Working Paper No. 21/2019, Available at SSRN: https://ssrn.com/abstract=3336357 or http://dx.doi.org/10.2139/ssrn.3336357

Stephan Bruns

Department of Economics, University of Göttingen ( email )

Wilhelmsplatz 1
Göttingen, 37073
Germany

Alessio Moneta

Institute of Economics, Sant'Anna School of Advanced Studies ( email )

Piazza Martiri della Liberta', 33-I-56127
Pisa, PI
Italy
56127 (Fax)

HOME PAGE: http://https://mail.sssup.it/~amoneta/

David I. Stern (Contact Author)

Australian National University (ANU) - Crawford School of Public Policy ( email )

ANU College of Asia and the Pacific
J.G. Crawford Building, #132, Lennox Crossing
Canberra, Australian Capital Territory 0200
Australia

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