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Energy resource depletion and environmental degradation have become big challenges for China's sustainable development. Energy efficiency improvement is usually regarded as an major pathway for reducing the pressure on energy and the environment. However, this would be undermined by the rebound effect, because the rebound effect would partially or even totally offset the anticipated of efficiency improvement. Evidence of the rebound effect has important implications for the economic, resource and environmental consequences of improving energy efficiency, as well as enables policy makers to take informed decisions on energy and environmental issues. In this paper, we incorporate the endogenous energy efficiency into the model specification of rebound effect, and build a unified comprehensive framework for analyzing rebound effect and related issues. We applied this framework to conduct empirical analysis and comparison of heavy and light industries, considering heterogeneity across sub-industries. Furthermore, this paper goes beyond simple estimation of rebound effect, and takes additional effort to highlight the policy application via combining energy subsidies and technological progress with rebound effect. [ABSTRACT FROM AUTHOR]

Emissions from heavy urban traffic have been the most abundant components of urban air pollution in China. Compared to the fast increasing consumption of automobile, the growth rate of urban traffic infrastructure investment (UTII) is relative low. It is a controversial issue for the policymaker whether promoting the UTII could make a positive impact on reducing air pollution or not. This study is designed to test the relations between the UTII and air quality, using the data of 83 cities from 2000 to 2012. Based on the empirical results from the fixed effect model and dynamic panel data model, increasing the UTII could generally mitigate the air pollution, but the long-run and short-run effects are significantly different. In the short run, the UTII effect on air quality is −0.02, since the urban traffic infrastructure construction might cause more detours and road blockages, which would enhance the fine-particle emissions of the low-speed traffic. In contrast, the UTII could widen the roads and make the traffic system more accessible in the long run, so the estimated positive effect is about 0.05. The robustness tests about different regions and scales of cities are conducted. Policy suggestions are further recommended to reduce air pollution. [ABSTRACT FROM AUTHOR]