Household Energy Rebound and Welfare Changes in China: Implications for Energy Efficiency Improvement

The energy rebound effect offers a perspective that closely links energy efficiency improvements, household consumption, and industrial processes. This study examines household energy rebound effects and welfare changes across different income groups in China. It reveals heterogeneity in direct and indirect rebound effects: higher-income and urban households, as well as northern provinces, tend to exhibit stronger direct rebound. Indirect rebound varies, but with consumption of residence and food contributing the largest strengthening and weakening effect respectively. The welfare gains vary across groups, but there is a “low income-high rebound-low welfare” trap in low disposable income and coal dependent provinces. Extending the analysis from five representative provinces to all 30 provinces indicates that a substantial number of regions may experience this trap. These findings underscore the necessity for policy interventions that prioritize fair transition while supporting decarbonization in industrial processes.