Energy efficiency rebound effects: technical background

2.2.3 Energy efficiency rebound effects: technical background

Measuring rebound effects compares the technical potential However, energy efficiency gains lower the effective for energy savings from energy efficiency improvements

cost of energy, so users respond by using more. The with the energy savings actually realized. Formally, rebound magnitude of these effects depends on how flexibly magnitude is defined according to the following equation:

consumers can adjust their consumption and how

ES

A flexibly producers can substitute cheaper energy for

= 1 − ES

other production inputs that have become relatively more expensive for lack of their own efficiency improvements.

where ES A is the actual energy savings realized and ES P is Accordingly, actual energy savings will fall short of the potential energy savings as estimated from engineering potential energy savings. calculations.

Energy intensity can be favorably reduced despite large

If actual energy savings equal potential savings, rebound rebound effects because energy efficiency is only one is zero. If there are no actual savings, rebound is unity, or

factor affecting energy intensity.

A large and growing empirical literature pioneered backfire.

100%. If energy use rises, rebound is greater than 100%—a

by Brookes (1979) and Khazzoom (1980) assesses the Potential energy savings are calculated assuming that

magnitude of the rebound effect. Recent studies include energy efficiency gains reduce energy use, in households

Saunders (1992, 2008, forthcoming), Sorrell (2007, 2009), and businesses alike, in direct proportion to the magnitude

Turner (forthcoming), Tsao et al. (2010), and Jenkins et al. of the energy efficiency improvement. If every light bulb,

television, refrigerator, or air conditioner were replaced by a Roy (2000) first suggested that rebound effects in more efficient counterpart, whether existing or new, energy

developing countries may be larger than in industrialized use would be reduced correspondingly while the same end

countries. Li and Yonglei (2012) showed energy efficiency uses are served—perhaps even better served. Production

rebound in the PRC to have been very large from 1997 to using new energy-efficient technologies would reduce the

2008, backfiring in 3 of those years. Lin and Liu (2013) energy required to produce and transport any given good or analyzed passenger transportation in the PRC from 1994 service, correspondingly reducing energy use—with outsized to 2010 and found rebound at 107%—another backfire. potential benefits, as the production side of the economy

Chakravarty et al. (2013) provide a good survey of the uses two-thirds of energy globally (ExxonMobil 2009).

literature.

that run on schedule but without passengers, individual car trips where pooling is possible, machinery idled instead of shut down during a production stoppage—all are examples of energy used for no constructive purpose. Programs designed to raise public awareness of the social value of eliminating energy waste can have positive impact despite their reliance on altruism and social pressure rather than proven market signals.

As with demand management generally, Japan provides a good example of the potential of conservation programs in its Setsuden (“saving electricity”) movement (Box 2.2.4). The movement, which emerged following the Fukushima Daiichi nuclear accident, helped lower peak usage by 15% during the summer of 2012. The success of the Setsuden movement in preventing power outages in post-tsunami Japan attests to the potential of media awareness campaigns to change the behavior of firms and households. Though, in light of the extreme circumstances under which the program was initiated, the jury is out on the degree to which Japan’s experience can be replicated elsewhere. Although the exact magnitude of energy savings obtainable by eliminating purely wasteful energy use is uncertain, they would come at virtually no cost.

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