KAREN TURNER: Does the rebound effect kill the dream of decoupling economic growth from greenhouse gas emissions?

KAREN TURNER, economist at the University of Stirling

No. Only the extreme case of rebound, called backfire, where there is a net increase in energy consumption in response to increased energy efficiency, will cause energy use and related emissions to rise with GDP. Where rebound is less than 100 percent (which is most cases in our work and in the wider literature), this simply means that we will not realize one-for-one energy savings in response to an efficiency improvement.

Basically, a decrease in the implicit price of energy triggers rebound, and anything that offsets the decrease will counteract rebound. However, there are important issues to consider. Particularly in production, where the lowering of the implicit price of energy triggers a productivity improvement, rebound is not necessarily a bad thing. (Only the extreme case of backfire increases energy use and emissions.) It just means we have to work harder at achieving desired energy savings—for example, energy efficiency targets may have to be proportionately larger than energy reduction ones to allow for rebound.

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