The rebound effect on Latin American economies: evidence from the Colombian residential sector

Energy efficiency technologies have been promoted worldwide by policymakers and government and non-governmental institutions to decarbonize economies. In such context, Colombian government forecasted a total energy savings of around of 9% at the end of 2021 by promoting energy efficiency technologies across the different economic sectors. However, such efficiency goals may not be fully achieved due to the existence of the rebound effect. The rebound effect has the potential not only of entirely suppressing the energy savings expected but also of generating additional energy demand, a phenomenon known as backfire effect. Although the rebound effect has been extensively studied for developed countries, there is no empirical evidence of this phenomenon for South American countries. Hence, this study measures the direct rebound effect for all energy services consuming electricity in the household sector in Colombia along the period 2005–2013 by applying econometric techniques in a panel data for 15 states around the country. The results suggest a national rebound effect of 83.4% and values ranging across regions between 64.7 (Atlantico) and 78.9% (Meta). Our study points out that the rebound effect in Colombia follows a geographic patter, with high values at the interior of the country, which is relevant to various stakeholders in order to make informed decisions. Policymakers will gain knowledge on the role of the rebound effect in planning sustainability goals, whereas academics and practitioners will benefit of novel data regarding the role of the rebound effect in Latin American economies. Given the significance of our finding about rebound effect in a Latin American country, we conclude with some recommendations aimed at relevant stakeholders.