Regional Patterns of Energy Efficiency and Rebound Effects in the United Kingdom

Energy efficiency is widely promoted as a central strategy for reducing energy use, enhancing economic performance, and supporting sustainable economic growth. Yet efficiency-induced cost reductions can stimulate additional energy demand known as rebound or backfire effects whose magnitude varies across regions depending on economic structure and energy intensity. This study employs the British Integrated Energy–Environment Subnational Computable General Equilibrium (BRIT-EN CGE) model to evaluate the regional macroeconomic and environmental impacts of a 10% improvement in technical energy efficiency across production sectors and household consumption, as well as targeted gains in households and energy-intensive industries. Results show that economy-wide efficiency improvements generate positive economic outcomes in all UK regions, with factor incomes rising between 0.82% and 8.17%, private consumption increasing by 1.28–4.96%, and regional GDP expanding by 2.2–8.7%. Welfare gains are largest in Wales (+ 8.17%), Yorkshire and the Humber (+ 3.43%), and the Northwest (+ 2.28%), reflecting their higher energy intensities and stronger supply-chain linkages. These findings highlight that energy efficiency measures can stimulate regional economic growth, improve factor incomes, and enhance welfare, key dimensions of SDG 8. However, rebound effects remain substantial across the UK, ranging from 63% to over 107% in the economy-wide scenario, exceeding 100% in Northern Ireland, the West Midlands, and the South West. These results indicate that induced economic expansion and substitution effects absorb much of the expected energy savings, underscoring the need for integrated policy approaches that pair efficiency measures with complementary instruments such as pricing and regional targeting to ensure economic growth remains both inclusive and environmentally sustainable. Jel Codes: Q41, Q44, Q48, O11, C68, D63