Multiplier analysis of re-spending rebound effects

Briefings and reports

multiplierThis briefing focuses on a particular type of rebound effect, which results from re-spending decisions as households realise savings due to reduced energy requirements. Measuring rebound from
re-spending involves identifying changes in emissions-relevant energy use embodied in the supply chains of different goods/services that households may switch consumption between as their energy requirements are reduced.

In assessing re-spending options, we consider a carbon saving multiplier (CSM). This measures the change in embodied supply chain emissions per kilotonne (kt) directly saved by UK households. A key aim of policy will then be to limit the erosion of this multiplier value. Our central finding is that upward rebound effects in supply chains supporting re-spending decisions erode carbon saving multiplier effects of reduced energy spending. There may also be important effects in terms of increased emissions overseas (carbon leakage) because non-energy supply chains tend to be more international than energy supply chains.

This briefing will be of interest to both policy analysts and decision makers who need to identify key headline information in considering the wider impacts of energy efficiency and other policy options aimed at reducing household energy use.

Read more about our project ‘Energy saving innovations and economy wide rebound effects‘.