Rebound effect (conservation)

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This article is about the conservation effect. For the pharmacological term, see rebound effect.

The term rebound effect is used in energy conservation and green marketing to refer to increases in demand that are caused by the introduction of more efficient technologies. This increase in demand reduces the conservation effect of the improved technology on total resource use.

The existence of a rebound effect, increases in demand associated with increases in efficiency, is well-supported by economic theory. Studies in specific sectors have consistently confirmed the existence of this effect, but debates still remain over how important the effect is in different circumstances. In developed countries, the rebound effect is usually small to moderate, ranging from roughly 5% to 40%.^[1]^[2]^[3] There are suspicions that the rebound effect may be much more significant in the context of developing economies. ^[4]

A fuel-economy rebound effect of 20%, for instance, would mean that a 10% improvement in vehicle fuel economy would cause a 2% increase in the distance driven, leading to only an 8% reduction in consumption of fuel for a 10% increase in efficiency. This effect is closely related to the price elasticity of the good or service that the resource is used to provide. (For a more through explanation, see Jevons paradox)

Typical examples from the marketing perspective might be the growth in garden lighting after the introduction of energy saving CFLs or rising numbers of two-car households when small cars are sold as green or energy saving.

In his magazine column, journalist Andrew Potter has argued that improvements in efficiency "end up making things bigger or faster while keeping energy consumption constant", and that increased taxation is the only way to reduce resource use. He has proposed the principle of waste homeostasis, in analogy to Gerald Wilde's theory of risk homeostasis, suggesting that the total amount of waste is insensitive to improvements in efficiency (essentially, that the rebound effect is exactly 100%).^[5] However, studies have found that in developed countries the rebound effect is usually small, and that improvements in efficiency usually reduce resource use.^[1]