Question

What is a rebound effect? Give examples of micro- and macroeconomic rebound effects. Does the existence of rebound effects strengthen or weaken the case for a government program to weatherize the homes of low-income homeowners to reduce carbon emissions?

Answer 1

What is a rebound effect? Give examples of micro- and macroeconomic rebound effects. Does the existence of rebound effects strengthen or weaken the case for a government program to weatherize the homes of low-income homeowners to reduce carbon emissions?

Answer: it is used to describe the effect that lower cost of energy service, due to increase in energy efficiency has on consumption both individually and nationally.

It has strong influence by price elastic among all factors. If demand for service is elastic than it will improve energy efficiency and may raise energy use.

Rebound effect can be defined as increase in efficiency not as direct effort to reduce energy but as a result of overall production improvement.

Suppose due to advancement in technology energy use in daily basis decrease so it will helpful for the economy to use that energy in another work or it will encourage people to buy more big cars or vechile overall investment and saving will increase. Due to improve in efficiency this will be very helpful for government to take appropriate policy regarding energy saving. If energy will be consume and save efficiently than economy will work better and growth rate will be rapid.

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