In the pages of United Nations Industrial Development Organization (UNIDO)'s Making It quarterly magazine, Breakthrough Institute Energy and Climate Policy Director Jesse Jenkins and Senior Fellow Harry Saunders published an article explaining the impact and implications of the energy demand "rebound effect" spurred on by energy efficiency.

The article builds upon the Breakthrough Institute's "Energy Emergence: Rebound and Backfire as Emergent Phenomena", a comprehensive literature review pointing to the expert consensus and evidence that below-cost energy efficiency measures drive a rebound in energy consumption that erodes much of expected energy savings.

Read the full article: "Hot topic: Does energy efficiency lead to increased energy consumption?," Making It June, 2011

In the article, Jenkins and Saunders argue:

Truly cost-effective energy efficiency measures lower the effective price of the services derived from fuel consumption - heating, cooling, transportation, industrial processes, etc. - leading consumers and industry alike to demand more of these services. There are other indirect and economy-wide effects as well, as consumers re-spend money saved through efficiency on other energy-consuming goods and services, industrial sectors adjust to changes in the relative prices of final and intermediate goods, and greater energy productivity causes the economy as a whole to grow. Collectively, these economic mechanisms drive a rebound in demand for energy services that can erode much - and in some cases all - of the expected reductions in total energy use, along with much-hoped-for reductions in greenhouse gas emissions.

Furthermore, rebound effects are often most pronounced in the productive sectors of the economy, including industry and agriculture, as well as throughout the world's emerging economies.

...

Conventional climate mitigation strategies count on energy efficiency to do a great deal of work. For example, the IEA in a global climate stabilization scenario published by the agency in December 2009, estimates that efficiency measures could account for roughly half of the emissions reductions needed. Yet, from a climate or global resource conservation perspective, rebound effects mean that for every two steps forward taken through greater efficiency, rebounds take us one (or more) steps backwards. This is particularly true throughout the developing world, and in the productive sectors of the global economy.

A clear understanding of rebound effects therefore demands a fundamental re-assessment of energy efficiency's role in global climate mitigation efforts.

A continued failure to accurately and rigorously account for rebound effects risks an over-reliance on the ability of efficiency to deliver lasting reductions in energy use and greenhouse gas emissions. Without a greater emphasis on the other key climate mitigation lever at our disposal - the de-carbonization of global energy supplies through the deployment and improvement of low-carbon energy sources - the global community will fall dangerously short of climate mitigation goals.

At the same time, however, we can re-affirm the role of energy efficiency efforts in expanding human welfare and fueling global economic development. Unlocking the full potential of efficiency may very well mean the difference between a richer, more efficient world, and a poorer, less efficient world. The former is clearly the desirable case - even if the world uses more or less the same amount of energy in either scenario.

The pursuit of any and all cost-effective efficiency opportunities should thus continue as a key component of an efficient course for global development, even as we reconsider the degree to which these measures can contribute to climate mitigation efforts.

You can also find an introductory FAQ on the rebound effect here.

This piece is cross-posted from the Breakthrough Journal Tumblr.

I read Monika Bauerlein and Clara Jeffery's article, "All Work and No Pay: The Great Speedup," at midnight two days before we launched the Breakthrough Journal. I had just spent five hours with our Associate Editor sorting through photos, and I was tired. Little surprise that I found myself cheering Bauerlein and Jeffery on. "I am overworked! I am overstressed! I want to go to bed!"

The next morning it became clear that I wasn't the only overstressed person who had identified with the piece. Many of us feel like our technology owns us instead of vice versa; many of us struggle with life-work balance. But in the days following Breakthrough Journal's launch, I realized that in our sleeplessness and stress, we were conflating disparate trends and obfuscating the real issues at stake.

Continue reading "The Great Speedup?" »

By Teryn Norris, originally published at leadenergy.org

A few years ago, the high-tech giant Google helped reframe the national energy and climate policy debate when it launched its "RE<C" program, or "renewable energy cheaper than coal." The idea was clear: instead of primarily focusing on making fossil fuels expensive through climate policy, Google believed the U.S. should focus on driving down the price of clean energy through technological innovation -- or "making clean energy cheap," as the Breakthrough Institute puts it.

Today, in the midst of a raging national debate about energy and economic policy, Google took its analysis a big step further by releasing a new report and interactive website that offers one of the most comprehensive assessments ever performed on the economic impact of clean energy technology innovation.

Continue reading "Google: Energy Innovation Can Have A "Transformative Impact" On U.S." »

Updated 6/23/2011

Today, the House Appropriations Committee released its FY12 Energy and Water and Related Agencies Appropriations Bill, legislation that if passed would set FY12 funding levels for the Department of Energy and various other federal agencies. While the exact language of the bill has yet to be released, its high level summary suggests that the legislation would fund the DOE at $850 million below last year's levels and $5.9 billion below President Obama's FY12 request.

Within the DOE, the bill would:

• fund the Office of Science at $4.8 billion, cutting $43 million from its FY11 enacted budget, $616 million below the President's FY12 request.

• cut $491 million from the Office of Energy Efficiency and Renewable Energy (EERE)'s FY11 levels, funding the office at $1.3 billion, $1.9 billion below President Obama's FY12 budget request.

• fund the Advanced Research Projects Agency- Energy at $100 million, a cut of $100 million from the agency's FY11 enacted levels, and $450 million below Obama's FY12 request for the agency.

Updated 6/23/2011

One week ago, the House Appropriations Committee approved this fiscal year 2012 Energy and Water Appropriations bill, which will be put up for full House consideration after Independence Day. The text of the bill largely matches the funding cuts outlined above; stripping $400 billion from DOE's EERE 2011 funding level, and about $80 billion from ARPA-E's FY2011 funding level.

Stay tuned for continued coverage of the budget battle and implications for federal energy innovation investments.

See Also: Budget Battle, FY2011

Yesterday, Freakonomics featured the Breakthrough Institute on a panel of experts debating the myriad of questions surrounding the costs of Japan and Germany's recent decisions to turn away from nuclear power. The Freakonomics Quorum posed the following question:

With Japan deciding not to expand its nuclear power base, and Germany and Switzerland vowing to phase out nuclear power altogether, how will those (and other) countries replace that electricity, and what sort of political, economic, and environmental trickle-down effects will we see?

The Breakthrough Institute's response is appended below. The Freakonomics Quorum and full participant responses can be viewed here.

In the months following the tsunami-triggered nuclear crisis at the Fukushima Daiichi power station, both Japan and Germany announced major U-turns on nuclear policy. In separate, politically calculated moves, Chancellor Angela Merkel vowed to end Germany's reliance on nuclear power by 2022, while Prime Minister Naoto Kan scrapped plans to ramp up nuclear generation to 50 percent of Japan's power supply in the coming decades, each while reaffirming already-ambitious climate change goals.

The reality, however, is that turning their backs on nuclear power could push both nations' climate and environmental objectives out of reach. Simultaneously achieving both a nuclear phase-out and deep emissions cuts would necessitate an unprecedented - and unlikely - scale-up of renewable energy generation to fill the void left by the German and Japanese nuclear fleets.

Continue reading "Freakonomics Features BTI on Future of Nuclear Power" »

One week ago, the German government released a report outlining its plan to close all of its 17 nuclear power reactors by 2017 and power the country without causing electricity shortages. That plan hinges heavily on the construction of 16 GW of new fossil-fired power pants. This analysis finds that Germany's new strategy would make achieving the country's ambitious 2020 climate goals far more difficult. To both achieve emissions reduction goals and fully displace nuclear power, renewable energy would need to scale up from 17% of the country's power supply today to a full 57% of total electricity generation in just nine years' time.

Replacing Lost Nuclear Capacity and Electricity Generation

Table 1 below, excerpted from the report, outlines the German government's plan for replacing the 21.4 Gigawatts (GW) of lost nuclear power generation capacity.

The plan indicates that--in the absence of nuclear power--Germany will continue to be heavily reliant on fossil-fuel generation for the bulk of its electricity supply. The report calls for the construction of 5 GW of new natural gas power plants, in addition to 11 GW of new coal-fired power plants currently under construction in the country. This will leave the country with a net increase of 5 GW in coal-fired electricity capacity, after the retirement of some 6 GW of older, and more carbon-intensive, coal-fired power plants.

The report also proposes an increase in the country's capacity to generate electricity from biomass by 1.4 GW.

Continue reading "Analysis: Germany's Plan to Phase Out Nuclear Jeopardizes Emissions Goals" »

After 20 years of dominance, the pollution paradigm--the idea that we could solve climate change similar to the way we've addressed conventional pollution problems--irretrievably failed in 2010. At the end of 2009, the collapse in Copenhagen spelled the end of efforts to enact legally binding emissions caps at the international level. In the United States, cap and trade failed for the fourth time in ten years and is politically dead for decades.

Carbon pricing and emissions trading schemes are also in retreat in other nations around the world, including Canada and Australia. Recognizing both the political difficulties associated with carbon pricing and its failure to reduce emissions where it has been tried, more scholars and opinionmakers in other countries are advancing an innovation and investment-centered climate agenda developed over the years by the Breakthrough Institute and its allies.

Continue reading "More Voices Advance a New Climate Paradigm Abroad" »

The following essay was written by Tad Tietze and Elizabeth Humphrys, and originally published at the Australian Broadcasting Corporation website (http://www.abc.net.au/). The opinions expressed in the essay are those of the authors alone, and do not necessarily reflect the views of the Breakthrough Institute.

What if one of the biggest debates in federal politics today - the increasingly hysterical and partisan debate on a carbon price - actually mattered very little in terms of the practical outcomes purportedly being sought: the de-carbonisation of the Australian economy?

First some basic assumptions so that this doesn't get into a debate between "believers" and "sceptics". We are talking here to those, like us, who believe that climate change is real, human-driven, and poses a serious threat to ecology and society. We proceed on the basis that the consensus scientific opinions on the nature and scale of the threat are roughly right, and that rich countries with high carbon emissions like Australia need to slash emissions by over 90 per cent by 2050 if they are to play a just part in averting a global problem.

Yet it is precisely the immediacy and magnitude of the threat that leads us to reject the argument put by Wayne Swan in his speech to the National Press Club this week, that the "only way to drive investment in [clean-energy] technology is to put a price on pollution. Only a market mechanism does the job". Instead, we believe that seeing a "price on carbon" as central to a low-emissions future, whether in the form of a carbon tax or trading scheme, is both inadequate to the task at hand and a dangerous distraction from effective climate action.

Furthermore, while many people who want serious climate action have understandably thrown their weight behind the current carbon tax proposal being formulated in Canberra because at least "something" is being done, we believe this represents a political dead end for the climate movement which will constrain the possibilities for demanding more serious action in the future.

Continue reading "The Carbon Price Debate As Smokescreen For Inaction" »

By Harry Saunders and Jesse Jenkins

Update - 9/2/2011 - Please see corrigendum appended to this post

A recent article in Electricity Policy by Natural Resource Defense Council (NRDC) analysts (David Goldstein et al.) purports to offer a fresh look at the question of energy consumption rebound resulting from cost-effective efficiency improvements. But rather than advancing the ongoing discussion about rebound among serious energy analysts, NRDC attempts to turn back the clock, relying on outdated and recycled citations dating from as far back as the early 1990s and asserting that conclusions about rebound effects must be testable against "rigorously framed hypotheses" while failing to apply that standard to their own claims regarding the historic success of efficiency policies in reducing energy use.

In reviewing their article, it is difficult to escape the feeling that Goldstein and his colleagues simply ignore any recent work that is inconvenient to their premise, including a rich trove of literature and inquiry into rebound effects published in recent years. It is particularly revealing that the authors restrict their analysis to those sectors of the global energy economy where rebound effects appear to be least significant--end-use consumption in rich, developed economies. In so doing they ignore both the productive sectors of the economy responsible for two-thirds of the global energy use and the emerging economies driving the vast bulk of global energy demand growth--in short those sectors of the global energy economy in which the vast majority of current and future energy demand is concentrated and in which the rebound literature suggests rebound effects are likely to be greatest.

In fact, NRDC's contention that "rebounds at the economy-wide level are trivially small" is controverted by virtually every review of the evidence for energy efficiency rebound conducted in recent years. So while NRDC attempts to re-litigate a decades-old debate, for serious analysts and policymakers, particularly in Europe, this debate, about whether rebound exists and is non-trivial, is effectively over. The focus now is on developing a richer understanding of when and where such effects operate, at what scale, and, increasingly, a focus on what, if anything, can be done to mitigate such phenomena. The UK government, for example, now explicitly considers at least one rebound mechanism when planning efficiency policies. And the European Commission funded a large study in 2011 that begins from the consensus that rebound effects are real and significant, and explores what can done about it.

In the United States, the tone seems to be shifting and signs are appearing that energy researchers are beginning to realize they need to deal forthrightly with this issue. Many who before quite adamantly denied the rebound phenomenon now treat it more cautiously as the academic substantiveness of multiple recent studies becomes apparent. Small working groups of scholars are forming to address the gaps in our knowledge. The Center for Climate and Energy Decision Making at Carnegie Mellon University will soon host a gathering of scholars to define the research questions that call out for serious inquiry. And the latest Stanford Energy Modeling Forum study on energy efficiency (EMF, 2011), while it still overlooks much of the recent literature (perhaps because it was framed a few years ago) nonetheless acknowledges key rebound mechanisms.

The critical question really isn't whether or not rebound effects exist -- as basic economic theory dictates, they most certainly do -- but rather how large they may be in various contexts.

Truly cost-effective energy efficiency measures lower the effective price of the services derived from fuel consumption - heating, cooling, transportation, industrial processes, etc. We know that economic actors react in complex ways to changes in the relative and absolute prices of various goods and services, and in particular, that when prices fall, consumers and industry alike demand more of these services, all else being equal. Other indirect and economy-wide effects can result from efficiency improvements as well, as consumers re-spend money saved through efficiency on other energy-consuming goods and services, industrial sectors adjust to changes in the relative prices of final and intermediate goods, and greater energy productivity causes the economy as a whole to grow. Collectively, these various mechanisms are known as "rebound effects" as they drive a rebound in demand for energy services that significantly erodes reductions in total energy use otherwise expected from efficiency improvements, along with much-hoped-for reductions in greenhouse gas emissions. In rough terms, for every two steps forward we may take through efficiency, rebound effects take us one (or more) steps backwards.

(Read an introductory FAQ on rebound here)

Unfortunately, conventional forecasts of energy use and the reductions possible through efficiency measures routinely ignore many (if not all) of the various rebound mechanisms. To the extent rebound phenomena are non-trivial, the implication is that the traditional forecasts of global energy use on which so much of climate change policy is reliant may seriously understate the scale of the challenge by ignoring or improperly treating rebound, meaning we have less time than we think to devise climate solutions.

NRDC's entry into this high-stakes debate disappoints on the methodology side, as we discuss in detail below. But the article also reads like an effort to turn back the clock to a time five to ten years ago when many still dismissed the rebound phenomenon as irrelevant, the province of a few fringe theorists, perhaps. This finds its reflection in the outdated citations the analysts rely on, with the most frequently cited report dating from 2005 (IEA/Geller) and reliant in turn upon Greene (1992), itself a survey of even older literature.

The field has progressed substantially since then--especially in Europe.

Perhaps triggered by the exhaustive UK Energy Research Center study of rebound led by Steve Sorrell (2007, 2009), inquiry into rebound effects has since seen noteworthy advances overseas. Significant funding in Europe is now going to researchers examining the problem through multiple analytic methods, and the fruits of these labors are appearing monthly in the literature.

In a statement that NRDC's analysts clearly did not take to heart, Sorrell concluded his rigorous assessment of the literature in 2007 with this statement:

"It would be wrong to assume that, in the absence of evidence, rebound effects are so small that they can be disregarded. Under some circumstances ... economy-wide rebound effects may exceed 50% and could potentially increase energy consumption in the long-term. In other circumstances ... economy-wide rebound effects are likely to be smaller. But in no circumstances are they likely to be zero."

In 2011, one of your authors led another comprehensive survey of the field (Jenkins et al.), which concludes:

"Rebound effects are real and significant and combine to drive a total, economy-wide rebound in energy demand with the potential to erode much (and in some cases all) of the reductions in energy consumption expected to arise from below-cost efficiency improvements."

While both literature reviews put the state-of-the-art in the field at NRDC's fingertips, their analysts unfortunately opt to merely cite selectively from both works, while ignoring the broad consensus that has developed in the academic literature.

We suggest the NRDC would be better advised to instead climb on board and move without delay up this learning curve. The bright and committed staff and analysts at NRDC have much to contribute to the understanding - and management - of rebound effects.

But as it stands, there are several methodological difficulties with the current NRDC analysis. Two are central:

• First, the NRDC paper hangs on an effort to construct and examine "rigorously-testable hypotheses" of rebound, a method they fail to appropriately utilize, while eventually falling afoul of their own requirement for testability of hypotheses in their effort to prove the historic success of efficiency policies in reducing energy use.


• Second, the authors make the common error of focusing their arguments on the smallest part of the energy economy--end-use consumption in rich, developed economies. This means they ignore both the productive sector of the economy responsible for two-thirds of the global energy use and the emerging economies driving the vast bulk of global energy demand growth--and the different-in-kind rebound mechanics in play in both places. In such sectors, the shadow of Jevons still lurks (see Jenkins et al. 2011 for survey of key literature).

Other non-methodological difficulties arise in their portrayal of the positions of rebound analysts, possibly due to a failure to undertake the hard work of examining the rich and burgeoning recent literature. Whatever the cause, it leads them to falsely portray key elements of the debate, and to apparently lay claim to new insights that are in fact old ones.

Continue reading "Rebound and Rigor: NRDC's Entry into Rebound Effect Debate Stuck in the Past " »

The Breakthrough Institute, a think tank known principally for its work on climate and energy issues, has launched a new journal dedicated to rethinking progressive politics.

"We wanted to create a place where iconoclastic thinkers could work out challenging new ideas," said Ted Nordhaus, Breakthrough Institute co-founder. "Our ambition is to publish sharply argued essays that question common assumptions."

"How can we renew the American Dream in a post-American world?" said Michael Shellenberger, who along with Nordhaus serves as Executive Editor of the Breakthrough Journal. "That's a really hard question and the one that our contributors wanted to address in different ways."

Continue reading "Coming June 23, 2011: Breakthrough Journal" »

Cross-posted from Roger Pielke, Jr.'s blog.

[UPDATE: Foreign Policy has a story up titled "Frau Flip Flop" (with the image below). In the article Paul Hockenos writes that, "Some observers even say she has cleverly stolen the left-wing opposition's trump card and will win back voters by making Germany a model for clean, energy-efficient states with a thriving trade in solar panels and wind turbines. Finally, a vision! Even if it's not hers.

But it's hard to believe that Merkel can credibly reinvent herself again as the "ecology chancellor" and simply follow the path of least resistance to another term in office. In fact, her dramatic confirmation of Green policies will probably put wind in the sails of the original environmental party, cementing its status as a viable alternative to both the Social Democrats and the Christian Democrats.What Merkel may well have done is pave the way for the first-ever Green chancellor in 2013, as head of a ruling coalition like the one currently in the southwestern region of Baden-Württemberg."]

In The Climate Fix I lauded Germany's forward-looking energy policies, in which they had decided to use the technologies of today as a resource from which to build a bridge to tomorrow's energy technology (German readers, please see this translated essay as well). Germany's government has now burned that bridge by announcing the phase-out of nuclear power by 2022.

There is a lot of interesting commentary around. See especially the discussions by Werner Krauss at the Klimazwiebel (here and here).  Der Spiegel has a hard-hitting essay by Roland Nelles describing what he calls "Merkelism":

To a certain extent, the decision to phase out nuclear energy is a victory for Merkel's style of leadership -- let's call it Merkelism. The politics of Merkelism are based on two principles. The first is that, if the people want it, it must be right. The second is that whatever is useful to the people must also be useful to the chancellor.

With Merkelism, policies are developed with a long view -- namely with the next national election in mind. After the Fukushima catastrophe, the chancellor had two choices: She could either decide in favor of an expedited phaseout and take on the proponents of nuclear power within her own party. Or she could stubbornly stand behind her government's 2010 decision to extend the operating lives of Germany's nuclear power plants (itself a reversal of an earlier phaseout passed by the government of former Chancellor Gerhard Schröder) -- and take on the majority of the German population.

In the end, Merkel chose the lesser of the two evils. Even if it has irritated her own party, in the chancellor's mind it was the correct thing to do. It was also the only choice Merkel had if she wants to remain chancellor. Anything else would have led to a protracted debate over nuclear power with the opposition that Merkel could only lose. With the phaseout, she has a good chance of keeping the sympathies of a majority of voters, who are likely to conclude that she's not doing such a bad job after all.

The image at the top right of the excerpt above comes from Der Spiegel, and shows the latest public opinion polls which indicate that the Greens are running a strong second. The Greens are thus well placed as a future coalition partner, putting some had numbers behind Nelles' argument.

I have quickly calculated the implications for carbon dioxide emissions of the German decision, based on a projection of the 2020 electricity mix from RWI as reported by the Financial Times.  These estimates are shown in the graph to the left.

Using these numbers and the simplified carbon dioxide intensities from The Climate Fix I calculate the carbon dioxide emissions from Germany electricity generation, assuming constant demand, will increase by 8% from 2011 to 2020. The Breakthrough Institute also runs some numbers.  See Reuters as well.

Given Merkel's penchant for blowing with the political winds and the German public's Wutbürger politics, we should expect German energy policies to continue to be anything but stable.  Germany's energy policies have gone from potentially world-leading to incoherent in the blink of an eye. But perhaps part of the problem here is the tendency for analysts, me included, to see short-term change without fully appreciating the larger context. German democracy may presently be incapable of implementing a sensible energy policy. Regardless of Germany's domestic politics, its efforts to rapidly ramp up renewables -- if they actually stick as policies -- will nonetheless provide a worthwhile laboratory for what is technologically possible, and thus bears close watching.

Looking at the big picture, the question now I suppose is how long must we wait until the next German energy policy U-turn?