Environmental and Resource Economics

, Volume 66, Issue 3, pp 577–604 | Cite as

Will Technological Change Save the World? The Rebound Effect in International Transfers of Technology

  • Mare SarrEmail author
  • Tim Swanson


Technological change and its transfer to developing countries is often portrayed by policy-makers as a critical part of the solution to a resource problem such as climate change, based on the assumption that the transfer of resource-conserving technologies to developing countries will result in reduced use of natural capital by those countries. We demonstrate here, in a capital conversion based model of development, that the free transfer of resource-conserving technologies to developing countries will increase the options available to those countries, but that the way that they expend these options need not be in the direction of conserving resources. This is another example of the potential for a rebound effect to determine ultimate outcomes, here in the context of international technology transfer policy. The transfer of technologies is as likely to simply move developing countries more rapidly down the same development path as it is to alter the choices they make along that path. For this reason, the transfer of resource-conserving technologies, without incentives provided to alter development priorities, may not result in any resource-conservation at all.


Technological change Rebound effect Development path 

JEL Classification

O33 O39 O44 Q55 Q56 


  1. Ait-Sahalia Y, Parker JA, Yogo M (2004) Luxury goods and the equity premium. J Finance 59(6):2959–3004CrossRefGoogle Scholar
  2. Aronsson T, Backlund K, Sahlén L (2010) Technology transfers and the clean development mechanism in a North–South general equilibrium model. Resour Energy Econ 32(3):292–309CrossRefGoogle Scholar
  3. Barbier EB (1997) Introduction to the environmental Kuznets curve special issue. Environ Dev Econ 2(04):369–381CrossRefGoogle Scholar
  4. Barker T, Dagoumas A, Rubin J (2009) The macroeconomic rebound effect and the world economy. Energy Effic 2(4):411–427CrossRefGoogle Scholar
  5. Binswanger M (2001) Technological progress and sustainable development: what about the rebound effect? Ecol Econ 36(1):119–132CrossRefGoogle Scholar
  6. Bosetti V, Carraro C, Massetti E, Tavoni M (2008) International energy R&D spillovers and the economics of greenhouse gas atmospheric stabilization. Energy Econ 30(6):2912–2929CrossRefGoogle Scholar
  7. Bovenberg AL, Smulders SA (1996) Transitional impacts of environmental policy in an endogenous growth model. Int Econ Rev 37(4):861–893CrossRefGoogle Scholar
  8. Carbone JC, Smith VK (2008) Evaluating policy interventions with general equilibrium externalities. J Publ Econ 92(5):1254–1274CrossRefGoogle Scholar
  9. Chan NW, Gillingham K (2015) The microeconomic theory of the rebound effect and its welfare implications. J Assoc Environ Resour Econo 2(1):133–159Google Scholar
  10. Dasgupta S, Laplante B, Wang H, Wheeler D (2002) Confronting the environmental Kuznets curve. J Econ Perspect 16(1):147–168CrossRefGoogle Scholar
  11. Deaton A, Muellbauer J (1980) Economics and consumer behavior. Cambridge University Press, CambridgeCrossRefGoogle Scholar
  12. Di Maria C, Smulders SA (2004) Trade pessimists vs technology optimists: induced technical change and pollution havens. Adv Econ Anal Policy 3(2):7Google Scholar
  13. Dowlatabadi H (1998) Sensitivity of climate change mitigation estimates to assumptions about technical change. Energy Econ 20(5):473–493CrossRefGoogle Scholar
  14. Fisher-Vanden K (2008) Introduction to the special issue on technological change and the environment. Energy Econ 30(6):2731–2733CrossRefGoogle Scholar
  15. Fullerton D, Kim S-R (2008) Environmental investment and policy with distortionary taxes, and endogenous growth. J Environ Econ Manag 56(2):141–154CrossRefGoogle Scholar
  16. Gerlagh R, Kuik O (2014) Spill or leak? Carbon leakage with international technology spillovers: a CGE analysis. Energy Econ 45:381–388CrossRefGoogle Scholar
  17. Gillingham K, Newell RG, Pizer WA (2008) Modeling endogenous technological change for climate policy analysis. Energy Econ 30(6):2734–2753CrossRefGoogle Scholar
  18. Gillingham K, Rapson D, Wagner G (2015) The rebound effect and energy efficiency policy. Rev Environ Econ Policy 10:68–88CrossRefGoogle Scholar
  19. Grubb M (2000) Economic dimensions of technological and global responses to the Kyoto protocol. J Econ Stud 27(1/2):111–125CrossRefGoogle Scholar
  20. Hübler M, Baumstark L, Leimbach M, Edenhofer O, Bauer N (2012) An integrated assessment model with endogenous growth. Ecol Econ 83:118–131CrossRefGoogle Scholar
  21. IPCC. Metz B, Davidson O, Bosch P, Dave R, Meyer L (2007) Climate change 2007: mitigation: contribution of working group III to the fourth assessment report of the intergovernmental panel on climate change: summary for policymakers and technical summary. Cambridge University Press, CambridgeGoogle Scholar
  22. Jaffe AB, Newell RG, Stavins RN (2003) Technological change and the environment. Handb Environ Econ 1:461–516CrossRefGoogle Scholar
  23. Jin W, Zhang Z (2015) On the mechanism of international technology diffusion for energy technological progress. Fondazione Eni Enrico Mattei, MilanGoogle Scholar
  24. Lemoine D, Traeger C (2014) Watch your step: optimal policy in a tipping climate. Am Econ J Econ Policy 6(1):137–166CrossRefGoogle Scholar
  25. López RE, Yoon SW (2014) Pollution-income dynamics. Econ Lett 124(3):504–507CrossRefGoogle Scholar
  26. Löschel A (2002) Technological change in economic models of environmental policy: a survey. Ecol Econ 43(2):105–126CrossRefGoogle Scholar
  27. Millimet DL, List JA, Stengos T (2003) The environmental Kuznets curve: real progress or misspecified models? Rev Econ Stat 85(4):1038–1047CrossRefGoogle Scholar
  28. Munasinghe M (1999) Is environmental degradation an inevitable consequence of economic growth: tunneling through the environmental kuznets curve. Ecol Econ 29(1):89–109CrossRefGoogle Scholar
  29. Patterson MA, Rao AV (2014) GPOPS-II: a MATLAB software for solving multiple-phase optimal control problems using hp-adaptive Gaussian quadrature collocation methods and sparse nonlinear programming. ACM Trans Math Softw 41(1):1CrossRefGoogle Scholar
  30. Perino G, Requate T (2012) Does more stringent environmental regulation induce or reduce technology adoption? When the rate of technology adoption is inverted U-shaped. J Environ Econ Manag 64(3):456–467CrossRefGoogle Scholar
  31. Saunders HD (2000) A view from the macro side: rebound, backfire, and Khazzoom–Brookes. Energy Policy 28(6):439–449CrossRefGoogle Scholar
  32. Selden TM, Song D (1995) Neoclassical growth, the J curve for abatement, and the inverted U curve for pollution. J Environ Econ Manag 29(2):162–168CrossRefGoogle Scholar
  33. Smulders S, De Nooij M (2003) The impact of energy conservation on technology and economic growth. Resour Energy Econ 25(1):59–79CrossRefGoogle Scholar
  34. Smulders S, Di Maria C (2012) The cost of environmental policy under induced technical change. Working Paper 3,886, CESifoGoogle Scholar
  35. Stern DI (2004) The rise and fall of the environmental Kuznets curve. World Dev 32(8):1419–1439CrossRefGoogle Scholar
  36. Stokey NL (1998) Are there limits to growth? Int Econ Rev 39(1):1–31CrossRefGoogle Scholar
  37. Vollebergh HR, Kemfert C (2005) Special issue on technological change and the environment technological change. Ecol Econ 54(2–3):133–346CrossRefGoogle Scholar
  38. Wachter JA, Yogo M (2010) Why do household portfolio shares rise in wealth? Rev Financ Stud 23(11):3929–3965CrossRefGoogle Scholar
  39. Xepapadeas A (2005) Economic growth and the environment. Handb Environ Econ 3:1219–1271CrossRefGoogle Scholar
  40. Yang Z (1999) Should the North make unilateral technology transfers to the South? North–South cooperation and conflicts in responses to global climate change. Resour Energy Econ 21(1):67–87CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media Dordrecht 2016

Authors and Affiliations

  1. 1.School of EconomicsUniversity of Cape TownRondeboschSouth Africa
  2. 2.Department of International Economics and CIESGraduate Institute of International and Development StudiesGeneva 21Switzerland

Personalised recommendations