Estimating the Direct Rebound Effect in the Residential Energy Sector: An Application in Spain - Green Energy and Efficiency: An Economic Perspective - page 165

Along with their review, Sorrell et al. [ 15 ] identify the following sources of bias
in the estimation of rebound effects: (1) failing to consider other signi cant costs

apart from the cost of energy itself that may form part of the system, e.g. capital,
maintenance and time; (2) long periods of high energy prices, which could make
households more sensitive in regard to energy consumption; and (3) possible
endogeneity in energy ef

ciency.
Perhaps the only author to have analysed this issue in Spain is Freire-Gonz lez

[ 5 ], who estimates the rebound effect from services arising from the use of elec-
tricity in homes in Catalonia to be 35 % in the short term and 49 % in the long-term.
His paper uses aggregate economic and weather data affecting the municipalities of
Catalonia between 1999 and 2006 as control variables.
Most papers reviewed coincide in regard to the mechanisms that generate the
rebound effect, and focus their attention on estimating the direct effect. To estimate
higher order responses, more detailed information on the activities of the members
of the household are required, along with data on their interaction with markets.
Such data are not always available. Moreover, none of the papers reviewed uses
residential CO 2 emissions as a control variable in direct rebound effect models.
Accordingly, the present chapter sets out to provide more information on the
direct rebound effect in the residential sector in Spain, using detailed data on each
household and its consumption drawn up in 2012. An attempt is also made to link
the characteristics of each household, represented by CO 2 emissions, with energy
consumption in the form of electricity and natural gas.
A distinctive feature of the chapter is that it uses detailed information on energy
consumption in each household. This includes the use of variable costs per kWh of
electricity and natural gas, the rated electrical power and the total payment for the
electricity and natural gas consumption in 2012 by each household. The papers
reviewed use average prices to represent residential energy costs.
The

á

ndings of this study are particularly interesting given that in 2012 Spanish
households were experiencing an adverse economic situation. According to the INE
(Spain s National Institute of Statistics) the unemployment rate was 25 % and the

price index for residential fuel (electricity, gas and others) rose by 7.3 percentage
points more than the overall price index. Moreover, the INE

'

s Living Conditions
Survey reveals that in 2011 around 17 % of Spanish households stated that they had
not felt warm enough in winter [ 10 ].
The chapter has two objectives: (1) to estimate the direct rebound effect based on
an improvement in energy ef

'

ciency of heating and domestic hot water systems

red by electricity and natural gas; and (2) to estimate how the change in residential
CO 2 emissions affects fuel consumption. In the rst of these objectives it is assumed

that residential energy demand is explained largely by heating and domestic hot
water provision.
The results may be useful in designing policies to promote the ef

cient use of
energy and reductions in residential CO 2 emissions. For instance, knowing how
much domestic electricity consumption is likely to decrease with a given reduction
in residential CO 2 emissions can help to assess whether investments in household
improvements will prove cost-effective.