Saving Energy Can Encourage More Consumption

Trying to cut energy consumption and greenhouse gas emissions with more energy-efficient technology can sometimes backfire by encouraging people to consume more energy than before, according to a new study by the UK Energy Research Centre (UKERC).

The study, titled "The Rebound Effect: An Assessment of the Evidence for Economy-Wide Energy Savings from Improved Energy Efficiency," finds governments are overestimating how much energy can be saved through increased energy efficiency. The problem arises because, for example, people tend to drive more if their cars are more fuel-efficient, or to spend money saved from lower heating costs on other things that generate greenhouse gases, such as a vacation overseas.

Those tendencies are called, in the first case, a direct rebound effect, and in the second case, an indirect rebound effect.

"Rebound effects have been neglected by both experts and policymakers," said Steve Sorrell, the report's chief author and a senior fellow at the UKERC. "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. This is especially important given that the (UK) Climate Change Bill proposes legally binding commitments to meet carbon emissions reduction targets. We need to get the sums right."

The report, based on a research team's analysis of some 500 studies, finds that rebound effects can differ greatly depending on the technology and the people or industries using it. Sorrell found rebounds might cause energy savings to be reduced anywhere from 10 percent to more than 50 percent, compared to expected savings, with the largest rebounds tending to occur in the most energy-intensive areas. In some circumstances, in fact, improved energy efficiency can actually increase overall energy consumption; that effect, called "backfire," was seen, for example, after the development of the steam engine in the 19th Century.

"However the evidence does not suggest that improvements in energy efficiency routinely lead to economy-wide increases in energy consumption," Sorrell writes in the report. "At the same time the evidence suggests that economy-wide rebound effects will be at least 10 percent and often higher. Rebound effects therefore need to be factored into policy assessments."

In the report, Sorrell says policy-makers seeking to draft effective climate policy need to include "headroom" in their energy efficiency and consumption targets to account for rebound effects. Other ways to minimize rebounds include increasing energy or carbon costs as efficiency increases or to impose absolute caps on greenhouse gas emissions, the report stated.

"Rebound effects are notoriously complex," Sorrell writes. "Generally speaking we expect rebounds will be large in energy-intensive sectors and smaller for households or small businesses. This is important, since energy efficiency policy usually targets these smaller users."

UK Energy Research Centre, "'Rebound Effects' Threaten Success of UK Climate Policy." URL: (http://www.ukerc.ac.uk/MediaCentre/UKERCPressReleases/Releases2007/0710ReboundEffects.aspx)