REBOUND EFFECT FOR UK RESIDENTIAL SECTOR IAEE Confeence, Sngapoe, June 18-21, 2017 Mona Chtns (Unvesty of Suey) Roge Fouquet (LSE) Steve Soell (Unvesty of Sussex)
Outlne Rebound mechansms Data ovevew Model Results Dscusson
Rebound mechansms fo households Total Rebound=Dect Rebound+Indect Rebound Indect Rebound Lowe heatng cost and fuel blls Lghtng Moe o less emssons Less emssons Lowe unnng cost fo heatng Hghe oom tempeatue o leavng the heatng on fo longe Dect Rebound Moe emssons
Measung enegy sevce pce and Consumpton Data Souces (e.g. DECC, ONS) p E Enegy Pce (e.g. pence pe kwh) Enegy Effcency (e.g. lumen-hous pe kwh) E Enegy Consumpton (e.g. TWh fo lghtng) p S pe / Enegy Sevce Pce (e.g. pe lumen-hou) S E Enegy Sevce Consumpton (e.g. mllons of lumen-hous)
Enegy sevces n ths pesentaton Lghtng Heatng Wet and cold applances Othe applances Cookng Ca tanspot 5
1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015 Lghtng, Heatng, Wet & cold, Cookng, Ca (1964=100) Othe applances Aveage effcency by enegy sevce n the UK 1964-2015 (ndex, 1964=100) 600% 1200% 500% 1000% 400% 800% 300% 600% 200% 400% 100% 200% 0% 0% Lghtng Heatng Wet & cold applances Cookng Ca tanspot Othe applances 6
140 140 120 100 80 60 40 120 100 80 60 40 20 Real pce of enegy sevces (ndex, 1964=100) 20 0 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 Lghtng, Heatng, We & cold, Cookng, Ca (Index 1964=100) 2012 2015 Lghtng and applances, Cookng, Ca (Index 1964=100) Heatng Othe applances ( ndex 1964=100) Lghtng Heatng Cookng Othe Applances Wet & cold applances Ca tanspot 200 800 Real pce of enegy fo sevces (ndex, 1964=100) 180 160 140 120 100 80 60 700 600 500 400 300 200 100 0 Lghtng and Applances Cookng Ca tanspot Heatng 7
1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 Lghtng, Heatng, Wet & cold, Cookng, Ca (ndex 1964=100) Lghtng, Wet & cold, Cookng, Heatng, Ca (ndex=1964=100) Othe applances 450 400 350 300 250 200 150 100 50 0 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 Lghtng Wet & cold applances Cookng Heatng Ca tanspot Othe applances 450 400 7000 6000 5000 4000 3000 2000 1000 0 Othe applances Consumpton of enegy sevces pe equvalsed peson (ndex, 1964=100) 1000 900 Enegy consumpton pe equvalsed peson (ndex, 1964=100) 350 300 250 200 150 100 50 0 Lghtng Wet & cold applances Heatng Cookng Ca tanspot Othe applances 800 700 600 500 400 300 200 100 0 8
Total ebound estmaton (n tems of CO2) Total Rebound = whee: ps ps ( s ) u u x x s w w s ( s ) ps ps Dect ( s ) Indect : own-pce elastcty of sevce s ( ) : coss-pce elastcty of sevce wth espect to sevce s u : CO2 ntensty of sevce u s : CO2 ntensty of sevce s w : budget shae of sevce w s : budget shae of sevce s ( )
Two stage budgetng model Household expendtue Stage 1 Enegy sevces Tanspot Othe goods and sevces Lghtng Ca Stage 2 Heatng Othe tanspot Wet and cold applances Othe applances Cookng
Almost Ideal Demand System (AIDS) Stage 1: w t whee: z w =budget shae of categoy P z =pce of categoy z x=total expendtue pe equvalsed peson zt P=Laspeyes-lke pce ndex j ln p ln( ln P x t L t / P ) t w 0 ln z p t w z z t1 t t, z: 1, 2, 3 Addng up: Symmety: Homogenety: 1, 0, 0 0 z, z z z 0 z
Almost Ideal Demand System (AIDS) Stage 2: w ln p ln( x / P ) w t t t whee: j w =budget shae of sevce P j =pce of sevce j j jt ln P L t t w 0 t ln p t x =total expendtue on sevces pe equvalsed peson P =Laspeyes-lke pce ndex j j j 1 t, j: 1,, 4 Addng up: Symmety: Homogenety: 1, 0, j 0, j 0 j j j 0 1
Elastctes fo two-stage budgetng model Combned elastctes of stages 1 and 2 to obtan total pce and expendtue elastctes fo each enegy and tanspot sevce (Edgeton 1997). Wthn goup elastctes: Income elastcty Uncompensated pce elastcty Total/between goup elastctes: Income elastcty E e E E z 1 w z w w ( ) E z z s: Konecke s delta equal to one when =s and zeo elsewhee. Uncompensated pce elastcty e j ze( )j E( )w( z ) j [ z e( )( z ) ] UK household annual tme sees data 1964-2015 Iteatve Seemngly Unelated Regessons (ISUR) method fo system estmaton
Estmated aveage elastctes Total expendtue elastctes fo enegy sevces Expendtue elastcty Lghtng Heatng Wet & cold applances Othe applances Cookng Ca tanspot 0.96 1.29 1.10 0.99 0.81 0.89 Total pce elastctes fo enegy sevces Pce elastcty Lghtng Heatng Wet & cold applances Othe applances Cookng Ca tanspot Lghtng Heatng Wet & cold applances Othe applances Cookng Ca tanspot -0.936 0.381 0.088 0.059 0.036-0.037 0.040-0.696 0.065 0.031 0.044-0.050 0.050 0.343-0.922 0.044 0.049-0.043 0.061 0.438 0.098-0.939 0.064-0.039 0.037 0.382 0.084 0.048-0.917-0.032-0.004-0.03-0.006-0.003-0.004-0.54
Estmated aveage ebound effects Rebound effects between enegy and tanspot sevces Lghtng Heatng Wet & cold applances Othe applances Cookng Ca tanspot Lghtng 93.6% -39.4% -8.0% -5.1% -3.7% 1.8% Heatng -3.9% 69.6% -5.7% -3.8% -3.9% 1.4% Wet & cold applances -5.5% -39.3% 92.2% -5.2% -5.2% 1.8% Othe applance -7.0% -35.6% -8.3% 93.9% -5.7% 2.0% Cookng -3.6% -42.7% -8.0% -5.5% 91.7% 1.9% Ca tanspot 0.7% 9.7% 1.4% 0.7% 0.6% 54.2% Dect, ndect and total ebound effects fo enegy and tanspot sevces Dect ebound Indect ebound (enegy and tanspot sevces only) Total ebound Lghtng 93.6% -54.3% 39.31% Heatng 69.6% -15.9% 53.68% Wet & cold applances 92.2% -53.3% 38.92% Othe applances 94.0% -54.5% 39.40% Cookng 91.7% -57.8% 33.91% Ca tanspot 54.2% 13.1% 67.26%
Dscusson Data assumptons and lmtatons No backfe, but ebound s not neglgble and should not be neglected Indect ebound plays an mpotant ole Captal cost s wthn the expendtue on othe goods and sevce/othe tanspot categoes Indect ebound of non-enegy goods s neglected Aveage ebound ove the sample peod ebound ove the sample peod Compason wth ebound based on enegy/tanspot fuel demand
REBOUND EFFECT FOR UK RESIDENTIAL SECTOR IAEE Confeence, Sngapoe, June 18-21, 2017 Mona Chtns (Unvesty of Suey) Roge Fouquet (LSE) Steve Soell (Unvesty of Sussex)