More on the energy efficiency rebound effect

EiD readers are familiar with the energy efficiency rebound effect that has been a controversial topic of discussion for years. Carol L. Stimmel of Pike Research provided a good review of the effect for the website gigaom.com. No doubt there will be more on this topic soon.

The energy efficiency rebound:  major fire or blowing smoke?

Will a potential fundamental flaw in energy efficiency technology hold back the progress society has made with more efficient appliances and systems?

A lot of ink has been spilled over what some people believe is an inherent flaw in energy efficiency technology. But does the so-called energy efficiency rebound effect, also called Jevons Paradox, present a major fire or is it just blowing smoke?

Put simply, here’s how one version of the argument goes: Forecasts of savings from energy efficiency measures are overblown, because when prices go down and people start buying more efficient appliances — like air conditioners or refrigerators — they will choose devices with larger capacities and other options that will drive total consumption up. It’s a fairly simple problem to define, but notoriously complex to grasp, and could have nontrivial conclusions.

If powerful enough, the energy rebound effect could hamper an important trend in industrial, consumer and commercial energy efficiency. Between increased government mandates for energy efficiency measures and the promise of significant energy savings from energy suppliers, the developed world is becoming increasingly more efficient with its energy use.

But not everyone agrees that Jevons Paradox has any bite. The Rocky Mountain Institutes’ Chief Scientist, Amory Lovins agrees that the rebound effect exists, but says it is quite small — perhaps absurdly small. Lovins has fought arguments about the rebound effect for years, stating back in 1988:

“It is, I believe, now widely accepted to be a fallacy whose tedious repetition ill serves rational discourse and sound public policy.”

Nevertheless, the issue continues to reassert itself. David Owens, staff writer for The New Yorker describes the following scenario:

“Imagine a primitive village in which the only energy input is food and the only way to transport anything is to carry it or drag it over the ground.  Now invent the wheel. If the village were Lovinsland, [adhered to Lovin’s argument] this increase in efficiency would cause food consumption and production to fall.  In the real world, though, we know that the villagers will reinvest their sudden energy surplus, leading to a cascade of mutually reinforcing increases in consumption of all kinds.”

On the surface it seems to make sense – for the consumer, an energy efficiency improvement can function much like a decrease in price; it’s cheaper, so use more. Voila, the rebound effect.