ACEEE Analyzes Papers on the Rebound Effect

November 3, 2014 By Karen Henry

energy-intensity-energy manageIn 2012, ACEEE wrote a paper on the rebound effect, the tendency for a consumer or business to offset a portion of any energy savings by using energy more often. ACEEE found that while rebound exists, it is modest, averaging about 20 percent.

Recently, E2e and the Breakthrough Institute each published a paper about rebound. ACEEE summarized the findings of both papers in a recent blog post.

The E2e working white paper sees modestly higher rebound effects than the earlier ACEEE paper. E2e emphasized studies that show rebound of 11–21 percent due to economic growth. By way of comparison, the ACEEE paper estimates 10 percent direct rebound on average for the United States.

The Breakthrough paper, on the other hand, alleges that the rebound effect is much larger than most other research has found and that it often results in “backfire,” meaning that rebound is larger than the efficiency savings and therefore energy use increases rather than decreases. For lighting, Breakthrough relies on work by Fouquet and Pearson as evidence for backfire. The work shows that lighting energy use in the 1800s grew much faster than incomes as society switched from low-efficiency candles to higher efficiency kerosene and gas lamps; however, Breakthrough does not discuss how in the 1900s, as electric lighting became predominant, Fouquet and Pearson find that lighting energy use increased much more slowly than incomes increased.

Breakthrough also discusses how electricity use has risen more quickly than generating plant efficiency has increased. The authors call this backfire, but then they go on to say that these trends are also affected by rising incomes, urbanization, changes in consumer preferences and other socioeconomic and demographic trends. They provide no evidence on the importance of energy efficiency relative to these other factors and seem to mix up energy efficiency and economic efficiency, ACEEE said. They focus on the period of 1900–1950 in the United States, when electricity use per capita increased 30 times, while residential prices decreased about 95 percent. The majority of the increase in electricity use was due to improvements in economic efficiency that go beyond the technological energy efficiency improvements, ACEEE added.

ACEEE concluded that while the E2e analysis is reasonable, Breakthrough appears to be more interested in exaggerating to make its case.

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