Energy rebound effect in China’s manufacturing sector: Fresh evidence from firm-level data

Abstract

The rebound effect refers to the phenomenon that individuals tend to consume more energy in the face of energy efficiency improvement, which reduces the expected energy-saving effect. Previous empirical studies on the rebound effect of regions and sectors do not provide microscopic evidence. To fill this gap, we use China’s firm-level data to estimate the rebound effect in China’s manufacturing subsectors, providing a detailed picture of China’s rebound effect across different sectors and different regions in 2001–2008. Results show that a partial rebound effect robustly appears in all industries, and the disparity between sectors is quite broad, ranging from 43.2% to 96.8%. As for the dynamic rebound effect of subsectors, most subsectors present an upward trend, whereas few subsectors show a clear downward trend. As a whole, the declined trend of the rebound effect is driven by the descent of minority sectors with high energy consumption and high energy-saving potential. In addition, we find that the disparity of the rebound effect across sectors is more significant than that across regions.