Incorporating energy rebound effect in technological advancement and green building construction: A case study of China

Energy conservation and emission reduction issues in the construction phase of buildings are increasingly important to meet the challenges of sustainable building. Technological advancement is considered as one of the essential driving forces for green and sustainable construction. But, it is not as effective as expected because the anticipated energy conservation from efficiency improvement would be partially or even totally offset if energy rebound effect exists. This paper fills the research gap by quantitatively investigating the impacts of technological advancement on energy consumption in China's building construction industry by incorporating direct rebound effect. First, technological advancement rate in terms of energy efficiency is measured by constructing an energy-environmental non-radial directional distance function (ENNDF), which provides a strong support for the Porter hypothesis. Second, by incorporating asymmetric energy price decomposition into a framework of translog cost function, it is estimated that 21.8% energy savings from energy efficiency improvement in China's construction industry are offset due to rebound effect. Based on the measured results of technological advancement rate and rebound effect, further counterfactual analyses find that technological advancement contributes 27.11 million tons of standard coal equivalent (Mtce) of energy conservation for the construction industry over the period 2003-2012, and 7.57 Mtce of energy would have been saved in the sector if there were no rebound effect. Empirical findings in this paper reveal that technological innovation as well as energy pricing reforms, tax policies and other environmental regulations should be further implemented to achieve effective energy conservation for green building construction. (C) 2016 Elsevier B.V. All rights reserved.