Could the Rebound Effect Undermine Climate Efforts?

One member of the Guardian’s environment desk admits to leaving his energy-saving light bulbs on more than traditional bulbs. Owners of fuel-efficient cars tend to drive them more often.

These are both examples of an often-overlooked phenomenon which, according to a new report, could undermine attempts to tackle climate change.

The so-called rebound effect occurs when some of the savings from energy efficiency are cancelled out by changes in people’s behaviour. On a consumer level it can be direct (turning up the heating in a newly insulated house) or indirect (spending the money saved on bills on a flight to Spain). And on a macro-economic level, improved efficiency is usually believed to lead to lower prices and more demand.

In one of the largest literature reviews on the topic yet, the American think-tank the Breakthrough Institute has concluded that at an economy-wide level the rebound effect could have a serious impact.

“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,” says the report’s lead author, Jesse Jenkins. This could have important policy implications, but more on that later.

Efficiencies lost

On an individual level there is reasonably good evidence of a rebound effect in relation to car use and space heating: the report estimates that 10–30% of energy savings from efficient cars and homes are lost.

Exactly why this occurs is not well researched. It could be because if something costs less, we start to use it more. Or perhaps doing something beneficial to the environment gives us “moral licence” to compensate with something less beneficial. It is interesting that people who see themselves as leading sustainable lifestyles are often the most carbon-intensive.

In reality there could be many reasons why — especially in the case of heating houses — greater efficiency doesn’t lead to the savings that are expected. Kathryn Janda, author of a recent report on home energy use from the UK Energy Research Centre said:

“Often, buildings don’t perform as expected, partially because occupants behave in more complex ways than designers account for; they open windows, leave doors open, generate body heat, keep tropical fish tanks and install plasma TV screens.”

For every action…

Steve Sorrell, energy policy expert at the University of Sussex looked at three energy-saving actions — turning the heating down 1°C, replacing car journeys under two miles with walking or cycling, and throwing away one-third less food. According to Sorrell, if you did these three things and then spent the money you saved in line with your typical spending patterns, the rebound effect would be 34%. That is, 34% of the greenhouse gas reductions would be cancelled out because of the goods and services that the extra money will be spent on.

But according to Breakthrough Institute, the highest rebound in energy use from efficiency occurs “not at the consumer level but in the productive sectors of the economy (industry and commerce) improving the efficiency of a steel plant may result in lower cost of steel, greater demand for steel, and also create greater economic growth — all of which will drive significant rebound in energy use following efficiency improvements.”

So what does all this mean? The rebound effect is still an under-researched and controversial topic. But if these findings hold true, some commentators argue that this shows the need for a carbon tax, because much of the rebound effect seems to stem from the fact that energy efficiency (usually) saves money. Others such as Breakthrough Institute argue that policymakers should focus on generating low-carbon energy, so that it doesn’t matter how much we consume.

However, in terms of UK policies on energy efficiency, NGOs and academics argue that focusing on environmental as well as money-saving messages, and making the connection between single initiatives such as home insulation and the bigger picture, are important for trying to reduce the rebound effect.

According to environmental psychologist Lorraine Whitmarsh: “If you’re framing something like the green deal [for energy efficiency in homes] purely in terms of money saving — and especially if you’re promoting cruises as a reward — then you’re actually undermining what you’re trying to achieve. You have to take a more holistic approach, not just look at one policy.”

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This article was originally published on on Tuesday 22 February.

Copyright The Guardian. All rights reserved.



Sylvia Rowley

Freelance Journalist

Sylvia Rowley is a journalist and environmental policy adviser. She won the Guardian’s international development journalism competition in 2008 and has written for publications including The Guardian, The Independent and National Geographic Green.

Join the Discussion

  • M. Elborg

    Surely we need a more holistic approach!

    Applied to energy and efficiency, the rebound effect (or `Jevons Paradox` as it is called by others) is supposed to be the correlation, that as energy efficiency increases, energy consumption goes up at the same time. To conclude from this, that the earlier is the cause for the later is rather farfetched and disregards all other changing variables!

    Energy efficiency increased over time. Energy consumption increased over the same period of time. Therefore, as energy efficiency went up, so did energy consumption. That does not the explain any cause – effect relation yet!

    A detailed example is offered for example here:

    “[…] Consider the following:

    Real (inflation adjusted) per capita income increased by just over 30% over that time period. All else being equal, when people have more money, they buy more stuff, including cool air.

    The average size of new homes increased from 2,095 to 2,438 square feet, over 16%. More square feet means more area to cool and more energy needed to cool it.

    In 1993, of homes that had A.C., 38% only had room units while 62% had central air. By 2005, 75% of air conditioned homes had central units. Bigger units covering more rooms means more cool air and, you guessed it, more energy.

    (Real electricity prices were mostly flat over this time period, falling by just over 1%, contributing little, if anything, to the increase.)

    Finally, even though air conditioners were 28% more efficient in 2005 than in 1993, air conditioners last between 15 and 25 years. Using the mid-range lifespan of 20 years, and assuming that efficiency increased gradually from 1993 to 2005, and accounting for the introduction of new AC units associated with new home construction (about 1.5% of the housing stock in any given year), I calculated the efficiency of the average central air unit in service in 2005 to be about 11.5% more efficient than the average unit in 2009.

    Accounting only for the increased income over the timeframe and fixing Owen’s mistake of assuming that every air conditioner in service is new, a few rough calculations point to an increase in energy use for air conditioning of about 30% from 1993 to 2005, despite the gains in efficiency. Taking into account the larger size of new homes and the shift from room to central air units could easily account for the rest.

    All of the increase in energy consumption for air conditioning is easily explained by factors completely unrelated to increases in energy efficiency. All of these things would have happened anyway. Without the increases in efficiency, energy consumption would have been much higher.

    Worse, and even more transparently wrong, Owen points to the increasing use of air conditioning in the developing world, especially India and China, as evidence of a globally expanding Jevons effect. Never mind the fact that income in China is growing something like three times as fast as in the U.S. and that the cost of air conditioning as a share of average incomes are falling at an even greater rate.

  • Kenji Watanabe

    New York Times also wrote an article that discussed the rebound effect of energy efficiency.

    According to the article, some of the biggest rebound effects occur when new economic activity results from energy efficient technologies.. The overall results can be what’s called “backfire” more energy use than would have occurred without the improved efficiency.

    As an example, the article quoted Jeff Tsao of Sandia National Laboratories that as people have switched from candles to oil-powered lamps to incandescent bulbs and beyond, the amount of energy needed to produce a unit of light has plummeted. Yet people have found so many new places to light that today we spend the same proportion of our income on light as our much poorer ancestors did in 1700.

    Lastly the article concluded people are going to find ways to use energy more efficiently — that’s the story of civilization. But don’t count on them using less energy…

    I was sort of anxious by reading the article but here Sylvia concluded with positive notes that carbon tax and holistic approaches might result in a different outcome– the rebound effects are reducible.

    As our history shows, energy efficiency can create a whole new industry — lighting, steel, and car. Then what we have to seek is holistic approaches to contain the rebound effect. But in the era of changing climate and exponential number of global population using electricity, the challenges we face are unprecedented…

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