Periodic Reporting for period 1 - EFFECT (Effective environmental policies in Europe in the context of rebound effects)
Período documentado: 2017-05-01 hasta 2019-04-30
Work Package 2 focused on analytical tools, methods, and data. We developed a modelling approach that combines a technology-rich model based on life cycle assessment (LCA) and a behaviourally-realistic model for the global economy based on computable general equilibrium (CGE) modelling. The code required to run the model has been stored and documented in the GitHub repository ‘R-based tools for industrial ecology research’ (https://github.com/dfontv/Rtools).
Work Package 3 analysed ex-post and ex-ante scenarios of policy effectiveness in the context of rebound effects. The main case study focused on a subsidy on electric cars in the United Kingdom (UK). The main results describe significant economy-wide rebound effects associated with the subsidy which offset partly or completely any environmental gains achieved. The results also show the important role of macro-economic effects from price changes, particularly how the shift from petrol to electricity triggered additional demand for cheaper petrol.
Work Package 4 focused on policy recommendations to achieve environmental goals through effective policy. Specifically, we provided guidance on the role of LCA and macro-economic effects in policy impact assessment as well as knowledge gaps and research priorities. We also inferred recommendations based on the results of the case study on UK’s electric car subsidy, focusing on correcting potential policy and market failures. Specifically, we suggest that the subsidy may be too generous, and that more effective policy mixes are possible. Furthermore, externalities leading to large economy-wide rebound can be largely corrected by means of environmental taxes, with the proposed model being particularly valuable to test different policy mixes and tax rates.
Overall, 29 dissemination activities were or are planned to be carried out in the context of EFFECT: 7 seminars, 6 presentations at scientific conferences, 1 lecture, 14 peer-reviewed scientific articles (of which 4 report according to the objectives of the project), and 1 book chapter.
- Both LCA and CGE are integrated in a single framework using consistent assumptions and benchmark data. For example, physical life cycle inventories are being used to construct new sectors into the CGE model.
- Both micro and macro-economic rebound effects are calculated for multiple environmental indicators and through a life cycle perspective, allowing to identify trade-offs across impact categories and life cycle stages.
- Policy counterfactuals are built and integrated into the model using multiple regression models based on panel data. This avoids the generalisation of exogenous and costless technical changes from policy.
Moreover, the project delivered novel insights into the effectiveness of policy to deliver environmental gains in the context of rebound effects. Specifically, the results showed that the UK’s subsidy on electric cars is associated with notable economy-wide rebound effects, with a large share due to additional demand for cheaper petrol fuel. This approach can be used to determine optimal policy configurations to achieve environmental targets as well as the implications of market-correcting instruments such as carbon taxes