The rebound effect

Abstract

Cost-reducing improvements in energy efficiency usually result in a rebound effect, meaning that the resulting reduction in energy use is less than that implied by the improvement in efficiency itself. The size of the economy-wide rebound effect is crucial for estimating the contribution that energy efficiency improvements can make to reducing greenhouse gas emissions and for understanding the drivers of energy use. Jevons first argued in 1865 that improvements in energy efficiency increase total energy use, and in recent decades researchers have argued for and against this “backfire” hypothesis. Some recent studies find a large economy-wide rebound, around 100 per cent, but more research is needed to confirm or refute these results.