Modelling the rebound effect in Panta Rhei // Maximilian Banning

Maximilian Banning, Lara Ahmann, Markus Flaute, Christian Lutz
GWS



Link to the presentation file: https://ecfor.ru/publication/modelling-the-rebound-effect-in-panta-rhei/

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This presentation happened 3 September 2019, Russia, Sochi at 27th Inforum Conference.

The conference & materials: https://ecfor.ru/27th-inforum-world-conference/

Playlist with the other videos from the conference: https://www.youtube.com/playlist?list=PLJBJFs8UgQgpmWWFzqw87jdwOBQXQmLfu
Inforum’s site: http://www.inforum.umd.edu/

Inforum, or Interindustry Forecasting at the University of Maryland, was founded nearly 50 years ago by Dr. Clopper Almon, now Professor Emeritus of the University. It is dedicated to improving business planning, government policy analysis, and the general understanding of the economic environment.

The host side was the Institute of Economic Forecasting of the Russian Academy of Sciences. IEF RAS specializes in fundamental, applied and exploratory scientific research in the field of analysis and forecasting of the socio-economic prospects of Russia and its regions, and the development of recommendations and proposals with a goal to improve the quality of economic policy in Russia. The site is https://ecfor.ru.

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Notes:

The Rebound Effect:

• Definition: “ some or all of the expected reductions in energy consumption as a result of energy efficiency improvements are offset by an increasing demand for energy services ”

Barker et al. 2008: The Macroeconomic Rebound Effect and the UK Economy

Project and motivation:

► ReCapproject (https://www.macro-rebounds.org/english/)
• Reconsidering the Role of Energy and Resource Productivity for Economic Growth, and Developing Policy Options for Capping Macro-Level Rebound Effects
• Three year project funded by BMBF as part of FONA
• Partners: IÖW Berlin (lead), University of Göttingen
► The problem: energy consumption is declining less than expected
• Have rebound effects been neglected?
• What are magnitude and drivers of rebounds?
• How to model and address them?

Modelling rebounds in PANTA RHEI

► PANTA RHEI:
• Macroeconometric energy and environmental national model (INFORUM type, similar to E3ME)
• Parameters econometrically derived from historical time series, no neoclassical general equilibrium
• Based on official statistics (SNA, time series of IOT)
• Bottom-up (63 sectors)
• Fully interdependent
• Energy balance systematic
• Open for expert information/input from bottom-up models
• Net impacts (direct, indirect, induced effects)
► Comparison of models results for different scenarios: Energy efficiency increase or energy policy compared to Reference

Summary and outlook

► Rebound effects due to autonomous increase in energy efficiency are low in PANTA RHEI
• Parameters of behavioural equations are estimated econometrically (are they too low in the long term?)
• Less optimistic about substitution possibilities (elasticities) than neoclassical CGE models
• Macroeconomic/sectoral approach does not cover all rebounds (on micro level/international level)
► Model adjustment
• Elasticities for industry from ex-post estimations (using very detailed cost structure data from German manufacturing)
• Sensitivity analyses
► Main research interest is in policies to reduce rebound effects (not in modelling rebounds)
► Implementing different policy sets in the model and compare macroeconomic effects
• Current policy
• Prices (taxes, caps, market-based instruments)
• Regulation
• Policy mixes and rebound-proof policies
► Develop/evaluate rebound-proof policies with stakeholders and also discuss model characteristics such as elasticities