The Estimation of the Rebound Effects in Household Sector: The Case of Iran

I n recent years, the so-called Rebound effects that stem from energy efficiency gains have been of increasing interest in the economic literature. This effect happens when improvements in energy efficiency stimulate energy demand rather than decrease it. In the recent paper using Social Accounting Matrix data on the economy of Iran, the previous research has been extended on this field by evaluating the rebound effects on urban and rural household’s sectors. In order to measure the degree of the rebound effect, the CGE model of Iran with household sectors was used and the simulation study, assuming an exogenous energy improvement was conducted. Based on the results of the empirical analysis in this work, the highest size of the rebound effect corresponding to the urban household’s sector was found to be approximately 6/2 when oil and natural gas energy efficiency improves by 5%. Of course, except for electricity, in the rest of the cases there is a back fire. Moreover, in the rural households, the highest size of the return effect is 2/06 and belongs to the distributed gas energy. Therefore, the energy conservation policy promoted by the Iranian government may be unable to attain the desired goal.