A growing area of research into rebound effects from increased energy efficiency involves application of demand-driven input-output models to consider indirect energy consumption effects associated with re-spending decisions by households with reduced energy spending requirements. However, there is often a lack of clarity in applied studies as to how indirect effects involving energy use and/or carbon emissions in supply chains of both energy and non-energy goods and services have been calculated. We propose that more transparency for policymakers may be introduced by replacing consideration of what are often referred to as ‘indirect rebound’ effects with a simple Carbon Saving Multiplier metric. We illustrate using results from a demand-driven input-output model that tracks supply chain activity at national and/or global level. We argue that this captures and conveys the same information on quantity adjustments in energy used in supply chain activity but does so in a manner that is more positive, transparent, understandable and useful for a policy audience. This is achieved by focusing (here via carbon emissions) on the net benefits of changes in different types of energy use at both household and supply chain levels when energy efficiency improves in households.
Read more about our project on ‘Energy saving innovations and economy wide rebound effects‘.