AUTHOR=Long Houyin , Zeng Hong , Lin Xinyi 

TITLE=The Electricity Rebound Effect: Empirical Evidence From the Chinese Chemical Industry

JOURNAL=Frontiers in Energy Research

VOLUME=Volume 9 - 2021

YEAR=2022

URL=https://www.frontiersin.org/journals/energy-research/articles/10.3389/fenrg.2021.814888

DOI=10.3389/fenrg.2021.814888

ISSN=2296-598X

ABSTRACT=Chinese government has adopted many policies to save energy and electricity in chemical industry by improving technology and been reforming its electricity market. The improved electricity efficiency and the electricity reform indirectly may reduce expected energy and electricity savings by decreasing the effective electricity price and the marginal cost of electricity services. To analyze the above issues, this paper employs the Morishima Elasticity of Substitution of the electricity cost share equation which is estimated by the DOLS method. The results show that: (1) There exists rebound effect in Chinese chemical industry, but it is quitely large because the electricity price is been controlled by government; (2) The reform of electricity market reduces the rebound effect to 73.85%, as electricity price began to reflect cost information to some extent; (3) There is still a lot of space for the reform to improve, and the rebound effect could be reduced further once electricity price is adjusted to transfer the market information more correctly. In order to succeed in saving electricity and decreasing the rebound effect in chemical industry, the policy implications are provided from perspectives of the improved energy efficiency and electricity pricing mechanism.