Rebound Effect And Welfare Analysis Of Energy Consumption In Chinese Households

From the United Nations General Assembly in September to the Climate Ambition Summit in December 2020,President Xi Jinping has repeatedly said that CO₂emissions will peak by 2030 and become carbon neutral by 2060.Since then,from the central government to local governments,they have formulated action plans to reach peak CO₂emissions,and the government work reports of various regions in 2021contain detailed plans for achieving carbon peak.As a national green development strategy,"achieving carbon peaking by 2030 and carbon neutrality by 2060"is profoundly affecting economic and industrial development,and changing residents'lifestyles.Carbon reduction targets are gradually becoming concrete actions.China's household energy demand is rapidly increasing and will continue to grow rapidly in the foreseeable future.Therefore,the development path of household energy consumption is one of the key factors that determine whether China can achieve carbon emissions peak and carbon neutrality.In policy,reforming and improving the energy price mechanism and encouraging technological innovation to improve energy efficiency are the main measures to achieve energy conservation and emission reduction in the household sector.However,the energy rebound effect theory suggests that energy efficiency can change the behavioral choices of economic agents and affect welfare through some transmission mechanisms such as substitution effect,and income effect.In reality,the existence and size of energy rebound effect are directly related to the formulation of energy efficiency policies and the effectiveness of their implementation.This paper takes the direct rebound effect of household energy consumption caused by energy efficiency improvement as the research object.For empirical strategies,we gradually relax the assumptions of the traditional energy economy on the direct rebound effect,and investigate the rebound effect of natural gas consumption,air conditioners electricity consumption and passenger fuel consumption,respectively.At the same time,the cost-benefit analysis framework is adopted to explore the impact of the rebound effect on welfare,so as to provide reference for the formulation and optimization of household energy conservation and emission reduction policies in China.The main contents and findings of this paper are as follows:(1)In 1980-2017,China's household energy consumption increases yearly,and its structure has shifted from coal-dominated to electricity-and natural gas-dominated.Additionally,there are significant imbalances in household energy consumption among different areas,such as urban and rural,north and south,east and west,and across provinces.Furthermore,Chinese household energy consumption per capita is only about 32.07%of that of American households in 2017,which implies there is still huge room for growth in Chinese household energy consumption,and thus the household sector will face increasingly pressure on energy conservation and emission reduction in the future.(2)Based on the availability of data,different representations of the rebound effect are used to estimate the direct rebound effect of household consumption of different energy species(natural gas,electricity,and fuel oil)under different constraints,respectively.We first consider energy efficiency as an exogenous variable and assume that energy service efficiency elasticity and energy demand price elasticity are the same.Based on six-year data of 15,000 households in Hefei,it is found that the rebound effects of natural gas consumption by household customers in Hefei are 42%?62%.Then,the exogenous assumption is dropped,in other words,we indirectly estimate efficiency elasticity of energy services based on the efficiency elasticity of energy demand.The empirical results show that the direct rebound effects of air conditioners are 27.2%?39.1%using 2014 Chinese residential energy consumption survey(CRECS 2014).Finally,using micro-survey data,it is assumed that the passenger vehicle mileage is affected by fuel prices and fuel efficiency.Thus the rebound effect is directly estimated by the percentage of the increase in mileage caused by the fuel efficiency of passenger vehicles,and the direct rebound effects of fuel consumption in the household sector are about 12.7%?23.1%.In addition,the empirical analysis reveals there are significant differences in the rebound effects across income levels and household sizes,so policy makers should balance efficiency and fairness and formulate energy efficiency policies in a targeted manner.(3)This paper combines the rebound effect with welfare analysis,and uses a cost-benefit method to explore the impact of the direct rebound effect of Chinese household energy consumption on welfare.It is found that the demand for energy services grows more rapidly as the rebound effect increases,i.e.,the external costs grows faster than the consumer surplus,resulting in a significant reduction in the size of welfare.The impact of the rebound effect on welfare depends on the size of the rebound effect.When the rebound effect is small,the social welfare will not be completely crowded out,so the government does not need the cooperation of other policies in promoting energy efficiency policies.Conversely,when the rebound effect is relatively large,the government needs to adopt moderate economic stimulus policies to curb the rebound effect,which is conducive to the balance between energy conservation and economic development.Based on the above analysis,this paper puts forward policy recommendations for household energy use.First,energy price policy and energy efficiency standards are important policy tools for energy conservation and emission reduction in the household sector.However,the goals of social equity should be taken into consideration,and regional differences,household income and household size differences should be fully considered.Second,from the perspective of social welfare maximize,the transformation of household energy consumption behavior should insist on the combination of measures including economic incentive and mandatory energy efficiency standard.Meanwhile,the basic pattern of energy consumption should be adjusted to meet consumers'energy consumption in pursuit of comfortable life and also effectively curbing extravagant consumption,in this way to drive household energy consumption in a low-carbon,equitable and effective manner.