A Computable General Equilibrium Model for the Decomposition of the Energy Carriers Rebound Effect in the Iranian Economy

Statistical evidence of energy carriers (which are used in the production of goods and services and final demand components) indicates that their consumption in Iran is higher than the average in the world and is less energy-efficient, so demand side management (DSM) is essential. Among DSM methods, improving energy efficiency is an important approach in the global economy. Assuming an improvement of 5% efficiency of energy carriers, the purpose of this paper is to provide (1) Estimating the total rebound effect (RE) of the economy and its decomposition by product and final demand (2) decomposition RE of the manufacturing sectors by the substitution and output effects. Methodology based on a two-stage approach, including the analysis of the economic RE on the segmentation of the manufacturing sectors and final demand, as well as the decomposition of economic sector's RE on the substitution and output effects. The results show that the overall economic RE for coal, gasoline, diesel, electricity and natural gas is 34, 30, 26, 23 and 18 percent, respectively, so that expected energy savings are not achieved after energy (especially coal, gasoline, diesel, electricity and natural gas) efficiency improvement. The results indicate that the most energy-dependent parts also had the most RE. Also, the findings show that, in the short term, economic firms, in order to have the most benefit from improving the efficiency of energy carriers), use a substitution approach between energy carriers (including coal, gasoline, diesel, electricity and natural gas) and other inputs, and development of production capacity is transferred to a long period of time