The Role Of Efficiency In Energy Conservation

Technology policies are the most favorable options for energy conservation and emission reduction. However, energy rebound effects remind people that the expected energy saving enabled by the enhancement in energy-efficiency will be reduced by the higher energy consumption to the increase in efficiency."Jevons Paradox" predicted that the improvement in energy-efficiency will increase energy usage. Is it realistic economic premise that technological progress can reduce energy depletion, and by implication, its carbon trail? How much does the energy-efficiency contribute to the energy conservation and environment impacts? And does "Jevons Paradox" exist in China? The theoretical and empirical research on energy rebound effects prompt people to review the policies which blindly emphasize technology progress in energy conservation. Research on the energy rebound effect due to efficiency improvement has a great significance for energy theory and policy formulation.With literature review, theoretical study, historical evidence, empirical estimation and policy suggestion, this paper investigates the energy rebound effects from the theoretical and empirical perspective. The whole thesis is divided into five parts. The first chapter is the introduction part which provides the background, the significance, the content and the method used in this paper, as well as related studies at home and abroad. The second chapter is the study basis and theory frame, which systematically investigates the formation mechanism of energy rebound effects at different levels, and preliminarily expounds the relationship among energy-efficiency, economic growth and energy usage. This chapter provides the theoretical foundation for the following empirical research. The third chapter is historical review, which tries to capture historical evidence on the energy rebound effects, especially the "backfire effect" by related historical data and information. The fourth chapter is the empirical research, which estimates China’s energy rebound effect at the macro level by mathematical derivation and econometric models, and makes a comparative analysis of rebound effects among eastern, middle and western region of China. In the fifth chapter, the paper summarizes the basic study conclusion and puts forward the policy advices. In this paper, we can draw several conclusions below.Firstly, theoretically speaking, technical progress can promote economic growth, but its influence on energy consumption is uncertain. Energy rebound effect is the extent to which the estimated energy saving enabled by the enhancement in energy efficiency are reduced by higher consumption due to the increase in efficiency. Further mathematical derivation shows that the larger the output elasticity of energy is, the larger the energy rebound effects will be. The short-term effect is only relevant to the output elasticity of energy, whereas the long-term effect is relevant to the output elasticity of energy as well as other factor like saving rate, output elasticity of capital and the ratio of capital to output. More specifically, the long-term effect is positively correlated with saving rate and output elasticity of capital, and negatively correlated with the ratio of capital to output.Secondly, though energy-efficiency enhancement will lead to an increase output, and thus promote the energy demand, there is no "Jevons Paradox" in China at the macro level. The average short-term rebound effect in China is11.4206%, and the long-term effect is12.0789%. The result is comforting. Because it turns out that technological innovation which aims at energy-efficiency improvement is still a desirable route to energy conservation despite the adverse impact of rebound effect.Thirdly, the rebound effect is largest in the west and smallest in the west, and the differences are caused by the imbalance of economic structure and growth mode. The larger the output elasticity of energy is, the more vulnerable the energy conservation policies in form of energy-efficiency will be. Therefore, to alleviate the contradiction between energy conservation and economic growth in different regions, more attention should be paid to the coordinated and balanced program of regional economy and technical progress.Fourth, the rebound effects have negative impact on energy saving and emission reduction, which should not be ignored. We can’t effectively reduce energy consumption if we only rely on technical method. To thoroughly solve the problem of energy restrictions, we need to fully aware of energy rebound effects and combine technology innovation with other policies.The paper may have the following innovative points. The first point is the subject. The investigation on energy rebound effect in this thesis provides a new perspective of the relationship between the energy depletion and energy-efficiency, and questions the traditional belief that energy-efficiency enhancement can effectively reduce the energy consumption, at the same time challenges the energy-saving policies which try to limit energy usage and carbon emission by technical progress. The second point is the theoretical research. Given studies on energy rebound effects in China are confined to a few papers of empirical research, and related theoretical research is comparatively scarce, this thesis analyses the definition of rebound effects and their formation mechanism, refining relevant domestic theoretical research.The third point is the empirical research. This paper fully draws on experience abroad and published research, taking the domestic situation into consideration. It makes a rigorous mathematical model derivation by presenting a framework incorporating three input factors of neoclassical product function and energy technology function. Consequently, the paper estimates the energy rebound effect in a more reasonable and accurate way.