Recovery of oil products in Iran by substitution and production effects: A two-stage approach in the form of a general equivalence model

In the energy economics literature, one of the most important approaches to managing energy demand is to improve energy efficiency, which is associated with a concept called a rebound effect. The rebound effect causes the energy saving (due to improved efficiency) to be less than expected. Considering the importance of using oil products in the Iranian economy, the present paper tries to track the factors affecting the rebound of petroleum products (gasoline, gas oil and other products) by applying a 5% shock to improving their efficiency and quantitatively, for this purpose, the analysis of the rebound effect at two macro levels and a part is done in two steps in the form of a computable general equilibrium model. The results of this paper, indicate that among the oil products, improvement of the efficiency of "other oil products" has the least effect on the economy-wide rebound effect, and improving the efficiency of gasoil has the highest economy-wide rebound effect. The results of the decomposition of the rebound effect at the macro level are those of the manufacturing sector, which are the major consumers of oil products (a larger share of the total energy consumption of production), the main factors in the formation of the rebound effect, so that in the case of gasoline, the "road transport" section accounts for 35.2 percent of the economy-wide rebound effect. In the final demand side, urban households account for 20% of the economy-wide rebound effect. The decomposition of the rebound effect at sector level also indicates the domination of the mechanism of substitution effect on output effect in the formation of the rebound effect.