Can the rebound effect negate energy efficiency efforts?

Through energy efficiency measures, Switzerland hopes to reduce its final energy consumption by almost 45% by 2050. However, a paradoxical phenomenon known as the “rebound effect” could well wipe out a significant part of this effort, unless appropriate accompanying measures are implemented in parallel.

Are energy-efficiency measures… effective? The question may be asked in light of the following phenomenon: instead of leading to significant energy savings, efficiency measures seem to remain almost ineffective. This is known as the “rebound effect”, which corresponds to an increase in energy demand resulting from improved efficiency. Thus, while energy efficiency measures always reduce consumption, their impact will be less in the case of a rebound effect.

The different forms of rebound effect result from many parameters: socio-economic, geographical, behavioural and psychological. This complexity explains why it is difficult to distinguish the rebound effect from other effects, and makes it very difficult to measure its precise manifestations.

There is a distinction between direct and indirect rebound effects.

In the direct rebound effect, the increase in consumption induced by a measure of energy efficiency occurs in the same sector of activity. For example, improvements in engine efficiency in the automotive sector have been accompanied by an increase in the weight and cubic capacity of cars.

Similarly, in the field of lighting: old incandescent light bulbs have been replaced by LEDs, which are ten times more energy-efficient and have a twenty-fold longer life. As a result, the use of LEDs for ambient and decorative lighting has increased considerably, which would have been too expensive with the old incandescent bulbs, despite their lower purchase price. Another example from the housing sector: in Switzerland, an increase in the average heating temperature has been observed as a result of renovations. The building is heated more efficiently (i.e. at lower cost), but the inhabitants tend to prefer a higher room temperature, thus cancelling out up to 60% of the energy benefits brought by the improved quality of insulation.

IT also offers a striking example. Since the 1980s, the computing power of computer chips and memory storage has increased more than a million-fold. For example, a USB stick for data storage consumes the same energy as a floppy disk in the 1990s, but offers a million times more storage capacity. Yet these huge efficiency gains have not resulted in corresponding energy savings. On the contrary, it has resulted in a dramatic proliferation of new electronic equipment of all kinds with ever-increasing performance. Individually, these devices consume very little, but their number and diversity has increased so much that, in the end, this has resulted in a sharp increase in electricity consumption by the IT and electronics sector.

In the indirect (or overall) rebound effect, the savings resulting from improved efficiency are reinvested in another area. For example, switching from cars to electric bicycles in urban areas increases the energy efficiency of transport, saving money (less energy is needed) and time (previously lost in traffic). This saved time and money will tend to be reinvested in other activities or products (leisure, travel, shopping, etc.) which themselves consume energy. While the rebound effect is generally undesirable, this reallocation of resources may nevertheless have positive effects, particularly on economic growth.

To minimise the risks of a rebound effect, the implementation of energy efficiency technologies will have to be accompanied by appropriate accompanying measures: subsidies, taxes, incentives, etc. Given the potentially indirect nature of the rebound effect, measures to prevent it must take into account consumer behaviour as a whole.

Measures of an incentive nature, such as competitions for the best energy savings, information on the savings theoretically expected after a renovation, comparison with other households of the same size, “industrial benchmarking”, dissemination of good practices in energy savings, etc., have produced good results in some countries, particularly in France and Great Britain. The ecological tax, which is expected to emerge in Switzerland after 2020 [→ Q84] pursues the same objective in a “stick rather than carrot” approach. Whether incentives or penalties, both approaches aim to encourage new behaviours for a more rational use of energy resources.