Quote of the Day, November 3rd, 2008

"The dogmas of the quiet past, are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise -- with the occasion. As our case is new, so we must think anew, and act anew. We must disenthrall ourselves, and then we shall save our country."

-Abraham Lincoln, Annual message to Congress, December 1st, 1862

Comments

@Peter: Thanks for the comment. I'm glad you hold Breakthrough Institute to a high standard, which we appreciate.

We're actually nearing completion on a comprehensive review of the current state of the art in analysis, modeling, and empirical research into the rebound effect, so stay tuned in January for a very detailed look at this key issue.

You are right that rebound effects do not always eliminate 100% of the energy gains from energy efficiency measures -- a scenario known as "backfire." As you note, however, rebound effects are very real, and have been largely ignored in contemporary energy policymaking. Rebound effects at macroeconomic scales are quite significant, and backfire is even likely in certain circumstances.

To date, most American energy analysts will argue that rebound effects are "real but not significant" and often cite a range of 10-30% as the amount of efficiency savings "taken back" by rebound effects.

Those figures however trace their origin back to a good but limited study of energy consumption rebound among consumers in wealthy countries -- but these are precisely the scope of analysis and sectors of the economy where rebound would be lowest.

Two-thirds of global energy use is in the productive sectors of the economy (industry and business) and there, direct rebounds are typically much larger. Meanwhile, greater and greater shares of energy consumption are in the developing economies, where rebound is also greater, as demand for energy is far from saturated there, and improving the productivity of energy has profound impacts for the pace of economic expansion.

Studies of these micro-scale (or "direct") rebound effects are useful, but efficiency advocates in the U.S. have latched onto this limited research, which (intentionally or unintentionally) distracts attention from macro-rebound, indirect rebound and rebounds in developing nations.

Remember, for Jevons, his focus was on the macroeconomic impacts that are most important, and this was all intuitive. Increase the productivity of any factor and you increase both demand for all factors as well as economic output.

Now, 150 years later, as we consider the ability of efficiency to deliver lasting emissions reductions at a global scale, a growing body of research utilizing a variety of empirical, modeling, and economic methods have shed new light on these complex macroeconomic dynamics in which full-scale rebound resides, and in which the the scale of rebound does indeed become very significant.

And let's all remember, that the only scope that really matters from a climate perspective is the full scale of rebound in the global economy (e.g. one climate, one global economy).

Rebound effects are thus far more significant at this scale of analysis than generally believed, and while Owen may miss the mark once or twice, he is more right than not in his article, and worth reading closely. Stay tuned though for the kind of "nuanced analysis" on the rebound effect you've been looking for in early 2011. Take care,

Jesse Jenkins
Director of Energy and Climate Policy
Breakthrough Institute

By Jesse Jenkins on 2010 12 23