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Title Guaging Energy Rebound Effect in Selected Energy Intensive Industries in Pakistan

Author(s) Hafiz Muhammad Zahid

Abstract Abstract Availability of energy at affordable prices plays a vital role in beautification of any economy and sector. Over the passage of time, energy consumption substitutes with efficient-energy consumption because it is desirable for the sustainable industrial growth. Energy efficiency is the supply side and energy consumption is demand side phenomenon. One main source of energy efficiency is technological advancement and it is expected that it lowers the energy demand or a factor of energy saving. But in many cases expected energy saving targets are not achieved due to energy rebound effect. The present study investigates the effect of the technological efficiency gain on energy consumption in three (Steel, Fertilizer, Cement) selected energy intensive industries of Pakistan. Moreover, study also drives a general expression of the energy rebound effect. For this purpose, Cobb Douglas production function is used and empirically analyzed with the help of time series data from 1978-2015. In three models output of each industry is a dependent variable, while gross fixed capital formation, labor and total energy consumption of each selected industry are independent variables. The confirmation of unit root level is a pre-request for efficient and consistent outcomes especially when we analyze time series data. On average the energy rebound effect of selected industries is about two hundred and sixteen percent. At disaggregate level the range of energy rebound effect is about 186% in fertilizer industry, 337% in cement and 127% in steel industry. In comparison with other international studies, the energy rebound effect of Pakistani industries is significant. It mean our industrial sector positively responds to energy efficiency by consuming more energy. Such a size of energy rebound is meaningful as well alarming for future generations in terms of environmental degradation. Without planning, energy efficiency may be proven counterproductive. So, policy makers should incorporate the energy rebound effect for better implications. Keywords: Energy efficiency, Energy rebound effect, ARDL, ECM, Environment and efficiency

Type Thesis/Dissertation MS

Faculty Management Sciences

Department Economics

Language English

Publication Date 2020-10-22

Subject Economics

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