Estimating and analyzing direct rebound effects from improving fuel consumption efficiency in road transportation sector of Iran

Document Type : Research Article


1 Associate Professor of Economics, Razi University of Kermanshah, Iran

2 Assistant Professor of Economics, Razi University

3 Ma. Student/ Razi University of Kermanshah


Discussion related to improving energy efficiency associated with a problem called rebound effects or Backfire effects, these effects occurs when improving energy efficiency increases energy demand (direct and indirect) in different sectors of production and consumption. This effect occurs when improving technology, resulting in increased energy efficiency. This increasing efficiency have a side effect; become cheaper energy services, that is real price of energy services reduced. With suppose the demand curve downward, service demand increases and part of the expected energy for saving, is consumed. Therefore, the predicted energy saving from improving technology, by increasing the demand for energy services somewhat decreased. The potential importance of the rebound effects are derived at macro level, that the effect somewhat reduces benefits of improving efficiency and perhaps affect effectiveness of such policies. Review of empirical studies on rebound effects suggests that these effects according to time and place and effect of different environmental variables can be large or small, however, this effect has been identified and proven. In addition, variety calculation and extraction of different numbers in the field reduces the range reliability. One of the ways calibrate this effect for policy makers, expansion scope publication of empirical studies in this field and used of various computational methods.
The main objective in this study provide models that based on theirs can estimated rebound effects of improving efficiency of gasoline and diesel fuel consumption in road transportation sector of Iranian provinces. For this purpose, three definitions for estimating the direct rebound effect is expressed. Because Iran is faced with extreme limitations of data such as vehicle efficiency and demand for useful work, in this study, to obtain direct rebound effect, has been used own price elasticity of energy demand. In addition to determine exact effect of fuel prices on consumption, has been used of two types of fuel common in the road transport, gasoline and diesel fuel in two separate models with two-stage GMM for data of 30 provinces (except the Alborz Province) during the period 2004-2014. Moreover, is used of per capita income, substitution commodity price, population and number of vehicles in the models.
First to the existence of spurious regression in models, it is necessary to be investigate stationary variables used in the model and also cointegration between variables. Evaluation calculated statistics and their acceptance probability indicates that gasoline and diesel fuel consumption and Gasoline-fueled vehicles in the level are stationary, but other variables by once differencing became stationary. Also results of Kao cointegration test indicates cointegration between variables. So long-run equilibrium relationship between variables and absence of spurious regression model, in both models will be verified. The results of an accurate diagnosis of models; Sargan test results confirmed validity of instrumental variables. Arellano and Bond test results indicates presence of first order autocorrelation and rejected second order autocorrelation in error sentences of first difference and thus there is no bias in estimation models. Wald test results indicates validity and significance of all estimated coefficients. The results show that direct rebound effects from improving of gasoline and diesel fuel consumption efficiency, is 6 and 2 percent, respectively. In other words, 6 and 2 percent of potential savings re-used, and 94 and 98 percent of the remainder is stored.
In this study, according to the scope of particular time and place that selected and it can be argued that price policies not could well be caused change in fuel demand. Because if the highly fuel cost per kilometer, in this case removal of fuel subsidies, is a more effective method in reduction fuel demand. But now that distance traveled by vehicle not be sensitive fuel cost per kilometer, Fuel economy standards, is not a more effective method in reduction fuel demand. And it is recommended to evaluate environmental performance standards, be used of clean alternative fuels and increase investment in fleet renewal. Because in this case efficiency obtained, efficiency will be stable.


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