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• Energy rebound effect leads to "green paradox". • The effect of short-term energy rebound effect is greater than the long-term. • Investment bias and factor market distortion important for policy development. • Government decentralization can suppress the energy rebound effect. Analyzing the influence of energy rebound effect on carbon emissions at different urbanization stages is of great significance to improve the effectiveness of emission reduction polices. In this paper, the energy rebound effect is classified into the short-term energy rebound effect and the long-term energy rebound effect. Based on the environmental Kuznets curve, the nonlinear programming model of urbanization, energy rebound effect and carbon emissions is established to analyzed the influence mechanism of energy rebound effect on carbon emissions at different stages of urbanization. We further discuss how to avoid the impact of energy rebound effect on carbon emission reduction. The results show that: (1) The influence of short-term energy rebound effect on carbon emissions is greater than long-term energy rebound effect, and both of them decrease with the increase of urbanization rate. (2) The "discretionary" and "hitchhiking" behavior of local governments in formulating environmental policies will lead to the "Matthew Effect" of energy rebound effect. (3) Investment bias and factor market distortion could increase energy rebound effect, and they have obvious substitution effect. (4) The decentralization of power by local governments is an effective measure to suppress energy rebound effect. The analysis above could help local governments to formulate policies, suppressing the influence of energy rebound effect and promoting carbon emission reduction. [ABSTRACT FROM AUTHOR]