Understanding Energy Efficiency Rebound: Interview with Joyashree Roy

Dr. Joyashree Roy is currently the Professor of Economics at Jadavpur University, Kolkata in India. She initiated and also coordinates the Global Change Programme at Jadavpur University which focuses on selected aspects of Climate Change research and beyond.

What is your background and where are you based?

I'm a professor of economics at Jadavpur University. I teach graduate students and undergraduates on resource economics, energy economics, and the economics of climate change. I was trained as an economist, and did my PhD on energy economics.

I do econometric models of Indian industries and published a book on that topic. I’m currently working on a computable general equilibrium model based climate policy simulation studies. I was trained in environmental economics in the World Bank’s capacity building programme in India.

Previously I was teaching in India and got a Ford Foundation grant for post-doctoral work, and worked at Lawrence Berkeley National Laboratory (LBNL) in 1997 and 1998. I did my research at LBNL on modeling energy demand for energy intensive industries for six developing countries, and published this work in the journals Energy and Energy Economics.

How did you develop an interest in, and eventually study energy efficiency rebound?

At LBNL I was introduced to Lee Schipper and he was working on rebound. I found it very interesting and thought that it told an important story. I read the 1993 Energy Journal microeconomic behavior analysis by David Greene, looking at rebound in the transport sector, and took interest in the topic.

I had also been working with the Indian data for a very long time, and thought it would be important to understand. I expected rebound would be very high for a country with such high unmet energy demand.

At the time that I developed an interest in rebound, the Indian government was trying to scale up the solar lantern program in rural areas. I had been working in the villages for a long time and worked very closely with the villagers, and I saw what was going on, and I had the theory of rebound, and thought to try to measure it empirically.

At an IEEA conference in Quebec in Canada in 1999, there was this session on rebound with Mark Jaccard and Lee Schipper. I said I didn't think they were representing the developing country perspective. After that they wanted to come out with Energy Policy journal special issue and asked if I would like to contribute to it.

What did you find?

In India, people are using kerosene for lighting. But they also have a demand for kerosene use in cooking. When people can't save enough kerosene after using it for lighting, they switch to firewood for cooking. After implementing more efficient lighting systems, saved kerosene was used for cooking. However, overall lighting demand increased after implementing efficient lighting systems. There were limits to kerosene-based lighting because illumination was so low. With more efficient lighting systems, you have better lighting so you try to get your full demand met. This is a rebound effect, and when you extrapolate to other activities in the village the rebound effect increases.

Have you briefed policymakers and analysts about rebound?

The India study did get a lot of attention at the COP meetings. Between its publication and the COP-8 in Delhi, it got a lot of attention. The Clean Development Mechanism (CDM) was emerging as a tool and people were asking how can we include rebound in the CDM. In South Africa there was a group that was interested in incorporating rebound into the CDM, but ultimately it couldn't be incorporated.

People were really nervous about how to implement rebound at the policy level. Policy integration is not understood well. There are some research and policy gaps that need to be filled to address this question.

Have you talked to IEA and IPCC?

I have attended IEA and IPCC meetings. I am talking with some of the integrated assessment modelers at these organizations. Japan does account for rebound in their models, but most other models do not.

After my full-time year at LBNL, I continued to make trips to LBNL for seven to eight years, to work with the LBNL group. During that work we looked at how different integrated assessment models are using elasticity values and parameter values. We assessed how baseline projections would differ depending on whether you used developing country values or not; the differences were enormous. Earlier models had used simpler parameters. Integrating rebound into integrated assessment models yielded a very different and very interesting response.

I've talked a lot about rebound at IPCC meetings. I’ve also talked about rebound in the context of the global energy assessment (GEA) that has come out of International Institute for Applied Systems Analysis (IIASA).

What do you think of IEA saying rebound is only 9 percent?

I think it would be very difficult to say that rebound is just 9 percent. That's not a representative value.

Do you think people pick low levels of rebound because of the implications for climate mitigation scenarios?

Most of the low estimates come from engineers and are incorporated into engineering-based analyses. I think there’s a general lack of understanding about rebound. However, telling the truth is very important. If you really want to tell the truth you need to incorporate rebound and show how hard it is going to be to achieve sweeping energy savings from efficiency improvements.

Have you found resistance to telling the truth about rebound?

When the idea of rebound is brought to engineering groups, they typically feel that rebound undermines the ability for efficiency to deliver on energy savings. They ignore the potential behavioral responses due to efficiency improvements.

But if you are talking to an economist, they do understand what it means. Some of the integrated assessment models are old-style and have less flexibility. Their model is not able to capture rebound in their framework. So they are happy to not include it there.

Are you seeing a change in how institutions are dealing with rebound?

With the IEA's World Energy Assessment 2012 rebound is getting into the discussion again. I was once at Zurich to speak on rebound. There was a young scholar who did his PhD on rebound. He has done very nice work on the rebound and he shows how important it is, even though complex, to get the right number.

What should be the future of rebound study?

We should have better numbers on rebound coming out of developing countries. We need better studies of developed and developing countries. It would be good if the IEA recommend this to member nations to study rebound in different sectors so it can be integrated into the integrated assessment models.