China’s regional rebound effect based on modelling multi-regional CGE

ABSTRACT

Improving energy efficiency has been regarded as an important measure to reduce energy consumption, yet the rebound effect has greatly shrunken the energy saving consequences of this measure. To investigate regional rebound effect in China, a multi-region computed general equilibrium (CGE) model is established in this paper. The results show that there are obvious regional differences in the rebound effect in China. The primary energy rebound effects are positive, whereas the production-side power rebounds are below zero in most regions. We also simulated the energy subsidy reform scenarios, which indicates that reducing or even eliminating coal and oil subsidies will increase the production-side rebounds. Finally, feasible policy recommendations are put forward based on the results.

KEYWORDS:

• Rebound effect
• energy efficiency
• multi-region CGE
• energy subsidy reform
• energy tax structure

JEL CLASSIFICATION:

• C68
• Q43
• R13

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ Source: China Energy Statistics Yearbook 2017,http://www.stats.gov.cn/tjsj/tjcbw/201806/t20180612_1604117.html.

² Source: the 13th Five-Year Plan for Energy Development,http://www.ndrc.gov.cn/gzdt/201701/W020170117348373245462.pdf.

³ For detailed derivation, see Lu, Liu, and Zhou (2017).

⁴ Source: National Bureau of statistics of China, http://www.stats.gov.cn//ztjc/zthd/sjtjr/dejtjkfr/tjkp//201106/t20110613_71947.htm.

⁵ Source: United Nations, https://population.un.org/wpp/.

⁶ Source: Catherine Early, Health cost of China’s fossil fuel subsidies highlighted, Chinadialogue, 8 February 2017, https://www.chinadialogue.net/article/show/single/en/9956-Health-cost-of-China-s-fossil-fuel-subsidies-highlighted.

⁷ Source: Financial Times, http://blogs.ft.com/the-world/files/2016/07/GR262Xcarbon_tax_modern_energy_SR_CHART.png.

Additional information

Funding

This work was supported by the Beijing Municipai Social Science Foundation [18ZDA04];