Energy use tendencies in a resource-abundant country: the case of Canada

Abstract

Today’s global energy agenda focuses especially on the fields of increasing energy demand, security of supply and climate change. This situation causes the energy efficiency phenomenon to be considered by policymakers seriously, and additionally to be developed strategies by determining targets in this field. In this sense, it is thought that developments in the field of energy efficiency will increase energy savings and reduce emissions caused by high consumption. On the other hand, the expected improvements in energy saving based on consumer behavior are less than anticipated. In measuring the mentioned dimension, one of the important parameters is defined as the rebound effect. This effect is considered as a dilemma that is frequently emphasized, especially in developed countries since there is a prevailing opinion that the developments in energy efficiency may not cause the expected results in savings. Therefore, it is extremely important to accurately measure the dimensions of the said effect in terms of both guiding policymakers in their strategies on energy efficiency and preventing waste of resources. This study tests the validity of the rebound effect for Canada using annual data from 1972 to 2019. In the study, the Fourier Engle-Granger Cointegration Test, which is one of the current econometric methods, was used, and then FMOLS, CCR and DOLS methods were utilized for the estimation of the short- and long-term coefficients. Empirical findings suggest that increases in energy efficiency in Canada increase energy consumption. Thus, it can be said that the rebound effect is valid for Canada.