Could the ‘rebound effect’ undermine efficiency?

Being energy efficient in one area of life, can be counteracted by more carbon-intensive behaviour elsewhere, according to a new report.

The report by American think-tank, the Breakthrough Institute, looked at 96 published journal articles and is one of the largest literature reviews to date on the Rebound and Backfire effect.

The report found that energy savings through efficiency are cancelled out by a so-called ‘rebound effect’, used to describe the phenomenon where savings from energy efficiency are cancelled out by changes in people’s behaviour.

For example, saving money on your energy bills due to better insulation and then spending the money on driving your car more. In some cases the affect can exceed the original savings entirely.

For example, in a recent report by Kathryn Janda on home energy use from the UK Energy Research Centre, she found that energy efficiency at home does not always mean savings, saying that residents’ energy use is undervalued when constructing houses.

Breakthrough institute founders, Ted Nordhaus and Michael Shellenberger said: “Below-cost energy efficiency should no longer be considered a direct and easy way to reduce energy consumption or greenhouse gas emissions."

In 2007, the UK Energy Research Centre conducted a review of rebound effects and found similar results.  It concluded: "Rebound effects have been neglected by both experts and policymakers …This is a mistake. If we do not make sufficient allowance for rebound effects, we will overestimate the contribution that energy efficiency can make to reducing carbon emissions."

The report authors’ found the situation is often more acute when looking at business rather than individuals. A homeowner who makes his home more efficient may not increase the temperature that much, but improving the efficiency of a steel plant may result in lower cost of steel, greater demand, and also greater economic growth — all of which will drive significant rebound in energy use following efficiency improvements.

The Breakthrough Institute points out that rebound effects could theoretically be mitigated by raising the price of energy, either through energy taxes or a carbon tax.

They also say policymakers can no longer afford to assume that a direct relationship exists between energy efficiency gains and declines in total energy consumption or greenhouse gas emissions.

Jesse Jenkins, the report's lead author said: "For every two steps forward we take with below cost efficiency, rebound effects mean we take one or more steps backwards, sometimes enough to completely erode the initial gains made."

 

Image: Lee J Haywood | flickr