Energy Efficiency Gets Empirical on its Enemy

May 30, 2011

Industry News

Energy efficiency has an enemy – and they’re called the Rebounders. Many opponents of energy efficiency and conservation efforts around the country are touting the evils of the “energy rebound effect”.

The energy rebound effect theory claims that as the population adopts more energy efficient practices and utilizes more efficient equipment, the cost savings they realize on their utility bills or at the gas pump will result in a higher demand for energy. Wait… what?

Example: If I buy a hybrid-electric car, rebound theorists assume the cost savings I find at the gas pump from not having to fill up so frequently will encourage me to drive more often, using more gas in the long run than I would have in my old, gasoline combustion vehicle.

But how valid is this claim of energy rebound effect? The narrative claim above seems as if there could be a shred of legitimacy to it but this energy rebound theory has nothing more than anecdotal backing.

An article in the New York Times a few months back makes an attempt at validating the energy rebound theory. The author cites some so-called economists at the UK Energy Research Center: “When Britain’s UK Energy Research Center reviewed more than 500 studies on the subject, it rejected the assumption that rebound effects were small enough to be disregarded. The author of the 2007 report, Steve Sorrell, noted that these effects could, in some circumstances, potentially increase energy consumption in the long term.”

Please note the “could” … “in some circumstances” … and “potentially” snuck in there. Where’s the empirical data to back up these claims of rebound? It’s not in the 2007 report mentioned above, that’s for sure. I read all 123 pages of the non-sense report and almost every page is littered with opinion, hypothetical situations, and a lot of squishy language like “could”, “may”, and “extremely difficult to measure.”

A Natural Resources Defense Council (NRDC) team is just as irritated with this energy rebound propaganda as I am, apparently. This month, published a NRDC paper that actually utilizes empirical data to thwart off claims of rebound and backfire, once and for all.

The NRDC team’s findings:

  • “There are a finite number of hours to drive during the day, and an absolute level of heat desired in a home, beyond which consumer would not or cannot increase consumption. Thus, the percentage of energy demand caused by rebound can only continue to decrease. ―[A]s the consumption of a particular energy service increases, saturation effects should reduce the direct rebound effect.”
  • “The most comprehensive survey of the literature shows that the economy-wide rebound effect is about 0.5 percent. In other words, ―more than 99 percent of the direct energy savings from energy efficiency improvements remain after the economy-wide effects are taken into account.”
  • “California embarked on a broad set of policy reforms to encourage efficiency and promote renewable energy in 1974, and has continued since. The California Energy Commission has estimated the cumulative electricity savings produced by these policies, using conservative assumptions, at about 15 percent of load. The reduction in electricity use compared to the rest of the US is not smaller than what the policies were estimated to produce, it is greater. It is approximately four times as great.”
  • “The end uses with high rebounds were: residential water heating, space heating, and space cooling. In other words, people were demanding basic energy services, like being able to heat their home, pump water, and have hot water. Energy efficiency is a strategy that allows people to live a higher standard of living, with increased energy services, while decreasing their energy consumption.”

The NRDC paper contains supporting data from multiple resources that have conducted actual studies on energy rebound effect. I encourage you read it yourself to really get the full empirical effect. Either way, it is apparent now that energy efficiency naysayers and rebound theorists are doing a lot of hypothesizing without much data to support their claims.

If the rebound theory is going to have an actual impact on energy efficiency policy, it’s going to need a lot more empirical support to gain momentum.

Photo credit: kwod

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