Rebound Effect for Passenger Vehicles: Estimations with Micro Panel Data

Abstract

Currently, the Japanese government is studying and implementing various measures to prevent global warming. However, some sectors are still unsatisfactory for the prevention of global warming. The transportation sector is one of them. Measures for passenger vehicles, which account for a large share of the energy consumption of the sector, have been running late. Recently, environmental policies and tax systems have provided an increasingly positive environment for accelerating the improvement of fuel efficiency in passenger vehicles. However, the energy savings will induce a rebound effect, and the anticipated energy savings from these energy-efficiency improvement programs may not be achieved. This paper estimates the rebound effect for passenger vehicles in Japan using micro panel data. Our estimations confirm the existence of the rebound effect (18%). Thus, there is a possibility that the improvement policies intended to promote fuel efficiency may cause a partial decrease in the anticipated energy savings.