On the rebound? Feedback between energy intensities and energy uses in IEA countries
Introduction
The impact of more efficient energy use in reducing energy demand, and the overall prospects for restraining energy demand growth, are important topics in the context of environmental policy. Periodically, claims surface that improving energy efficiency improvements do not in fact reduce demand nearly as much as expected (a weak rebound) or that improved efficiency leads to effects that erase most of the expected savings (a strong rebound) or indeed stimulates greater energy use than if no improvements had taken place at all (a backfire) by lowering the cost of energy services and by stimulating economic activity (Brookes, 1990, Brookes, 1992, Brookes, 1993; responses by Grubb, 1990, Grubb, 1992).
New research permits us to search for 'rebound’ effects or more generalised `feedback’ between energy efficiency, energy use, and economic activity. Recent papers (Greening and Greene, 1998; Berkhout and Velthuisen, 1997 both summarised in this issue) review the literature and important theory. Here we define and measure key trends in the activity levels (or structure) of energy uses and intensities of energy uses in key sectors of nearly a dozen IEA countries.1 We interpret the changes in these indicators to search for various kinds of rebounds. (Other papers in this issue deal more directly with both theoretical issues and direct observations of real behaviour.)
In this paper our concern is whether demand is lower “than it would have been”, at a given time, without efficiency improvements; or alternatively, when the economy has reached a certain GDP. We also consider briefly whether the GDP itself grew faster as a result of energy efficiency improvements (leading more indirectly to greater energy use), a `macro’ rebound effect. Finally, we speculate on the impact of future efficiency improvements on energy use.
Succinctly, we find that any rebound in most cases is not observable in the sectoral and end-use data. Certainly, our findings would reject the 'strong’ rebound hypothesis that rebound (over the time periods analysed) could be large enough to offset most of the energy savings arising from efficiency improvements. Our thesis is not that the interaction is absent. Rather we conclude that feedback effects are small in mature sectors of mature economies, and only potentially large in a few cases; lowering energy intensities almost always leads to lower energy use than otherwise.
Of course, the scale of the system keeps increasing with population, household formation, and the climb of incomes and sectoral output. Consequently, we normalise most of our observations of absolute quantities to either population or GDP, and display changes in intensive quantities (e.g., energy intensities per unit activity) against GDP or personal consumption expenditures per capita. Thus, we are able to view many effects that account for both income and price or efficiency effects, i.e., the “less than otherwise” condition. We still may find that over a sufficient period, energy use has increased even if energy efficiency has improved, because population or GDP grew significantly, growth not significantly stimulated by the increases in energy efficiency. Our thesis, supported by the aforementioned surveys, is that the improvement in energy efficiency per se is only a small part of the reason why total end-use activities may have increased.
This analysis represents only a first step in searching for both micro- and macro-feedbacks between energy efficiencies and energy uses. All we can show at this stage is that the various rebounds, if present, offset only a small part of the overall savings in energy that arise from lower energy intensities.
Section snippets
The conceptual framework
The debate on “rebound” has confused conceptually distinct issues. The first concerns the extent to which there is a direct “feedback”, within an activity or sector, between energy efficiency improvements and the level of energy-using activities (compared to demand in the absence of those efficiency improvements), which we call the micro-rebound effect. This might also be called product substitution, since a consumer demands more of a given energy-service or product because it becomes cheaper.
Looking for the rebound: energy use and intensities in IEA countries 1970s to 1990s.
Recent work analysed the structure of energy use in more than a dozen IEA countries from the early 1970s (Schipper et al., 1996b, Schipper et al., 1996c, Schipper et al., 1997a; IEA, 1997a, IEA, 1997b, IEA, 1997c; Schipper et al., 1998). The end uses or activities A consist of:
- •
seven two- and three-digit ISIC branches of manufacturing;
- •
ten end-uses in households;
- •
five modes each of travel and freight;
- •
fuel and electricity in the service sector;
- •
For some countries, GDP in “other industry” consisting
Structural changes, technology and GDP responses
In all the sectors we have studied, prices for energy were heading down by the late 1980s. In most of the 13 countries we studied, road fuel prices lay at close to or below their 1973 levels in 1995, while heating fuels and industrial boiler fuels were still somewhat more expensive than in 1973. (Real electricity prices lay within ±20% of their 1973 values). Energy intensities of heating, driving, etc. remained below their 1970s levels, and showed little upturn as prices fell, although the
Policy implications
These observations suggest that the rebound debate may have overestimated the importance of energy in determining the mix of human and economic activities in an economy. The reason is that two centuries of technology have managed to reduce consumption of energy relative to the size of the economy even as energy prices fell, so that the costs of energy fell. With each reduction in the cost share of energy, its importance in determining the course of activities falls.
Rebound sensitivities are in
Overall conclusions
The serious energy literature, as well as the columns of important weeklies (New Scientist, 6 Sept. 1998) have debated the various rebound effects since the writings of Jevons. Most of this writing has been theoretical. We have looked at the empirical evidence for “rebound” of energy demand in response to energy efficiency improvements, using detailed sectoral data covering 80–90% of total energy demand in the countries studied. We find no major rebound effects, and where specific quantified
Acknowledgements
The authors acknowledge the comments of Dr. Kenneth wigley, formerly Head of the Economic Analysis Division of the International Energy Agency, and thank Jean-Marie Boundaire, Formerly Heat of the long term office of the IEA, whose insights stimulated this article and the entire issue.
References (55)
The Greenhouse effectthe fallacies in the energy efficiency solution
Energy Policy
(1990)Energy efficiency and economic fallaciesa reply
Energy Policy
(1992)Energy efficiency fallaciesthe debate concluded
Energy Policy
(1993)Energy efficiency and economic fallacies
Energy Policy
(1990)Reply to Brookes
Energy Policy
(1992)- et al.
Residential energy demand in OECD-countries and the role of irreversible efficiency improvements
Energy Economics
(1998) A view from the macro siderebound, backfire and Khazzoom–Brookes
Energy policy
(2000)- et al.
Energy conservation in Kenya's modern sectorprogress, potential, problems
Energy Policy.
(1983) - et al.
Improving appliance efficiency in Indonesia
Energy Policy.
(1991) - et al.
Energy use in the service sector: An international perspective
Energy policy
(1986)
Fuel prices and economyfactors affecting land travel
Transport Policy
The evolution of carbon dioxide emissions from energy use in industrialized countriesan end-use analysis
Energy Policy
The economics of house heating
Energy Economics
A review of new demand elasticities with special reference to short and long run effects of price changes
Journal of Transport Economics and Policy
Vehicle use and fuel economyhow big is the rebound effect?
The Energy Journal
Energy efficiency improvement of commercial aircraft
Decomposition of aggregate carbon intensity for the manufacturing sectorcomparison of declining trends from ten OECD countries for the period 1971 to 1991
Energy Economics
Energy use, technical efficiency, and the rebound effecta review of the literature
Complete Report to the U.S. Department of Energy
Energy savings resulting from the adoption of more efficient appliancesa follow-up
The Energy Journal
The energy cost of goods and services
Energy Policy
Energy efficiency and economic growth
Journal of Contemporary Econmic Problems
Cited by (183)
Dilemmas of energy efficiency: A systematic review of the rebound effect and attempts to curb energy consumption
2022, Energy Research and Social ScienceIdentifying rebound effects and formulating more sustainable energy efficiency policy: A global review and framework
2022, Energy Research and Social ScienceCitation Excerpt :In the literature devoted to the study of the rebound effect, there are many approaches to its classification. One of the most complete examples of the systematization of existing classifications is the work of S. Lange, which presents an analysis of more than 11 main classifications: Greening et al. [15], Schipper and Grubb [16], Polimeni et al. [17], Madlener and Alcott [18], Jenkins et al. [19], Maxwell et al. [20], Azevedo et al. [21], Michaels [22], Gillingham et al. [23], Santarius [24], Madlener and Turner [25]. At the same time, one of the important results of the analysis is the diagnosis of their common disadvantage – the lack of a clearly defined classification feature.
Technological innovation and structural change for economic development in China as an emerging market
2021, Technological Forecasting and Social ChangeThe Jevons paradox unravelled: A multi-level typology of rebound effects and mechanisms
2021, Energy Research and Social Science