Reducing rebound effect through fossil subsidies reform: A comprehensive evaluation in China

Hong Li, Qin Bao, Xusheng Ren, Yuantao Xie, Jingzheng Ren, Yingkui Yang

Research output: Journal article publicationJournal articleAcademic researchpeer-review

40 Citations (Scopus)


While energy efficiency improvement is the key influencing factor for this goal, its effectiveness is significantly determined by rebound effect. Energy subsidy as an economic regulation policy would significantly affect rebound effect. To explore how China's fossil subsidies reform would affect rebound effect, this study conducts a comprehensive evaluation based on a multi-sector computable general equilibrium (CGE) model. Rebound effects at different technological improvement levels are investigated and the impacts of different subsidies reform scenarios on mitigating rebound effects and on the whole economy is analyzed. The results provide significant policy insights: Firstly, rebound effect does exist in China, larger for electricity than for primary energies. Secondly, by removing fossil energy subsides, the rebound effect would be effectively mitigated, and removing all subsides would reduce the rebound effect most, however, it would bring significant negative impacts on the macro economy. Thirdly, an integrated policy with removal of fossil energy subsidies and increment of clean energy subsidies would be more effective, greatly reducing rebound effect and also bring benefits for both economy and environment. Our findings would be critical for China's low-carbon policy making in the future.
Original languageEnglish
Pages (from-to)305-314
Number of pages10
JournalJournal of Cleaner Production
Publication statusPublished - 10 Jan 2017
Externally publishedYes


  • China
  • Clean energy subsidies
  • Computable general equilibrium model
  • Fossil subsidy reform
  • Rebound effect

ASJC Scopus subject areas

  • Renewable Energy, Sustainability and the Environment
  • Environmental Science(all)
  • Strategy and Management
  • Industrial and Manufacturing Engineering

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