Measuring energy rebound effect in the Chinese economy: An economic accounting approach

- This paper develops an alternative approach for estimating energy rebound effect.
- The proposed approach is based on the multilevel-hierarchical (M-H) IDA model.
- The energy rebound effects in China are estimated between 30% and 40%.

Estimating the magnitude of China's economy-wide rebound effect has attracted much attention in recent years. Most existing studies measure the rebound effect through the additional energy consumption from technological progress. However, in general technological progress is not equivalent to energy efficiency improvement. Consequently, their estimation may be misleading. To overcome the limitation, this paper develops an alternative approach for estimating energy rebound effect. Based on the proposed approach, China's economy-wide energy rebound effect is revisited. The empirical result shows that during the period 1981-2011 the rebound effects in China are between 30% and 40%, with an average value of 34.3%.