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Revisiting Jevons's paradox of energy rebound: Policy implications and empirical evidence in consumer-oriented financial incentives from the Japanese automobile market, 2006–2016

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  • Yoo, Sunbin
  • Koh, Kyung Woong
  • Yoshida, Yoshikuni
  • Wakamori, Naoki

Abstract

While the fuel economy of Japanese automobiles has improved by 40% in the past decade, gasoline consumption in the transportation sector from 2007 to 2016 only decreased by 4%. We seek to explain this discrepancy by investigating Japanese fuel economy standards and the financial incentives given to consumers of fuel-efficient cars. To do so, this study explores whether Japanese policies caused such a rebound effect, by employing the difference-in-difference framework. We find that these policies contribute to energy rebound effect, by enabling higher fuel consumption at lower costs and thus causing higher energy usages. We provide evidence that policies can increase not only fuel usage but also fuel costs. The main driving force behind the rebound effect is the increase in the sales of hybrid vehicles, induced by financial incentives.

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  • Yoo, Sunbin & Koh, Kyung Woong & Yoshida, Yoshikuni & Wakamori, Naoki, 2019. "Revisiting Jevons's paradox of energy rebound: Policy implications and empirical evidence in consumer-oriented financial incentives from the Japanese automobile market, 2006–2016," Energy Policy, Elsevier, vol. 133(C).
    • Handle: RePEc:eee:enepol:v:133:y:2019:i:c:s0301421519305105
    DOI: 10.1016/j.enpol.2019.110923
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    Cited by:

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    2. Yoo, Sunbin & Koh, Kyung Woong & Yoshida, Yoshikuni, 2020. "Are consumers abandoning diesel automobiles because of contrasting diesel policies? Evidence from the Korean automobile market," Energy Economics, Elsevier, vol. 92(C).
    3. Yahong Jiang & Qunqi Wu & Min Li & Yulei Gu & Jun Yang, 2023. "What Is Affecting the Popularity of New Energy Vehicles? A Systematic Review Based on the Public Perspective," Sustainability, MDPI, vol. 15(18), pages 1-29, September.
    4. Wang, Kai-Hua & Su, Chi-Wei & Xiao, Yidong & Liu, Lu, 2022. "Is the oil price a barometer of China's automobile market? From a wavelet-based quantile-on-quantile regression perspective," Energy, Elsevier, vol. 240(C).
    5. Kong, Deyang & Xia, Quhong & Xue, Yixi & Zhao, Xin, 2020. "Effects of multi policies on electric vehicle diffusion under subsidy policy abolishment in China: A multi-actor perspective," Applied Energy, Elsevier, vol. 266(C).
    6. Konishi, Yoshifumi & Kuroda, Sho, 2023. "Why is Japan’s carbon emissions from road transportation declining?," Japan and the World Economy, Elsevier, vol. 66(C).
    7. Yuan, Zhen & Xu, Jie & Li, Bing & Yao, Tingting, 2022. "Limits of technological progress in controlling energy consumption: Evidence from the energy rebound effects across China's industrial sector," Energy, Elsevier, vol. 245(C).
    8. Rasti-Barzoki, Morteza & Moon, Ilkyeong, 2021. "A game theoretic approach for analyzing electric and gasoline-based vehicles’ competition in a supply chain under government sustainable strategies: A case study of South Korea," Renewable and Sustainable Energy Reviews, Elsevier, vol. 146(C).
    9. Wang, Jiayu & Yu, Shuao & Liu, Tiansen, 2021. "A theoretical analysis of the direct rebound effect caused by energy efficiency improvement of private consumers," Economic Analysis and Policy, Elsevier, vol. 69(C), pages 171-181.
    10. Jarke-Neuert, Johannes & Perino, Grischa, 2020. "Energy efficiency promotion backfires under cap-and-trade," Resource and Energy Economics, Elsevier, vol. 62(C).
    11. Rasti-Barzoki, Morteza & Moon, Ilkyeong, 2020. "A game theoretic approach for car pricing and its energy efficiency level versus governmental sustainability goals by considering rebound effect: A case study of South Korea," Applied Energy, Elsevier, vol. 271(C).

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    More about this item

    Keywords

    Hybrid electric vehicle; Rebound effect; Jevons's paradox; Energy backfires; Energy policy evaluations;
    All these keywords.

    JEL classification:

    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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