What’s the Rebound Effect?

Energy efficiency increases should contribute to the reduction of energy consumption. The reductions in consumption that would correspond to these efficiency increases can be calculated for each energy efficiency measure - provided consumer behaviour does not change. Studies show, however, that despite improvements in efficiency, energy consumption often does not fall as much as expected - rebound effects occur.

 

How can such effects be explained? One example is the electricity consumption of energy-saving lamps: because they consume less energy than a conventional light bulb, some users turn on three lamps instead of one or leave them switched on longer. Rebound effects can also be found in other areas: for example, when people buy more efficient washing machines or dishwashers and then let them run half-full more often, or buy "energy-efficient" but larger televisions and refrigerators. Although the new appliances are technologically more efficient than their predecessors are, they are used more often or consume more electricity due to their size.

Types of rebound effects

There are direct and indirect rebound effects.

  • Direct rebound effects occur when energy efficiency gains result in higher demand in the same area.
    For example: after insulating your house, you adjust the heating so that the average temperature in the house is higher than before renovation.
  • Indirect rebound effects occur when efficiency gains in one area lead to higher resource consumption in other areas.
    For example, a lower heating bill after building insulation can create financial leeway for new and more energy-intensive lighting in the house, or for long-distance travel. Indirect rebound effects can also occur if I install more energy-intensive lighting after insulating my building because I think I've already done enough to protect the environment.

Energy efficiency measures may not only lead to an increase in energy consumption, but consumer behaviour can also change in such a way that further energy savings are achieved. We call this sufficiency when it occurs in the same area, or spill-over effects when it occurs in other areas. They are the opposite of direct or indirect rebound effects and are sometimes called "negative" rebound effects. If you buy an efficient new washing machine and are led to think about the issue of energy-efficient washing, and then load the machines better or wash at lower temperatures, that would be an example of sufficiency. Spill-over effects occur when, for example, by purchasing a more economical showerhead and thinking about the issue of water efficiency, you are now prepared to purchase water-saving fittings for the washbasins.

If we look at the phenomenon of rebound effects at the macroeconomic level, we can also find macroeconomic rebounds. These can result, for example, from price effects (a more efficiently produced product becomes cheaper) or from growth effects (the economy grows through efficiency gains). If better efficiency increases production without using more energy or materials, this can lead to the resource being used more extensively in the sector as a whole.  In extreme cases, efficiency measures may even result in more energy being consumed overall.

Reasons for rebound effects

There are different explanations for rebound effects. Monetary reasons are often suggested: When consumers save electricity, their expenses are reduced and money is saved. With this money they can consume more of the same or other products. In the case of direct rebound effects, this is called the price effect: more energy can be consumed for the same money. Indirect rebound effects can occur from income effects - incomes rise, more goods can be demanded.


However, not all rebound effects can be explained purely in monetary terms. In addition to economic factors, rebound effects are also explained by psychological and other factors. For example, additional consumption can be explained by a clear-conscience effect, so-called "moral licensing": If a household switches to environmentally friendly electricity and thus significantly improves its CO2 balance, this can under certain circumstances mean that the inhabitants no longer consider it as necessary as before to save electricity - or to pay attention to environmental protection in other areas. Or there may be spill-over effects if, for example, the experience that something can be achieved through your own environmental behaviour motivates you to become more environmentally friendly in other areas as well.


A further reason for rebound effects can be a lack of knowledge in dealing with energy-efficient devices or technologies, so that the efficiency potentials are not fully exploited. This can occur, for example, when underfloor heating systems are used instead of radiators.