The rebound effect : some questions answered

Koerth-Baker, Maggie and Turner, Karen and De Fence, Janine and Cui, Cathy Xin (2011) The rebound effect : some questions answered. Fraser of Allander Economic Commentary, Special E (1). pp. 37-45. ISSN 2046-5378

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Greenhouse gas (and other pollutant) emissions from energy use are now taken to be a problem both internationally and for individual national and regional governments. A number of mechanisms are being employed to reduce energy consumption demand. A central one is increased efficiency in the use of energy. The Intergovernmental Panel on Climate Change (IPCC) of the United Nations (IPCC, 2007) projects that by 2030 energy efficiency gains will provide a substantial part of the remedy for climate change by reducing global energy consumption to approximately 30% below where it would otherwise be. Such a reduction is argued to be almost sufficient to offset energy consumption increases driven by projected global economic growth. Similarly the widely cited Stern report (Stern, 2007), and the International Energy Agency (e.g. IEA, 2009), attach crucial importance to the potential for efficiency improvements to reduce energy use and related emissions. Within the European Union, one of the EU 20-20-20 targets for member states is to reduce energy consumption by 20% through increased energy efficiency (see, for example, European Commission, 2009). Moreover, the European Strategic Energy Technology Plan (SET-Plan) – see, for example, European Commission (2010) – places energy efficiency at the centre of its Smart Cities and European Electricity Grid Initiatives (among the European Industrial Initiatives (EII)). At the UK level, the UK Energy White Paper (2003) describes energy efficiency as one of the most cost effective and safest ways of addressing energy and climate policy objectives. In Scotland, the recently published ‘Energy Action Plan’, the Scottish Government sets out Scotland’s first national target to improve energy efficiency and how this will be achieved with the use of grants given to local authorities. In the Appendix to this paper, for the reader’s information, we provide a summary overview of energy efficiency policy instruments currently active within the UK and Scotland. The purpose of the current paper is to clarify some issues relating to the phenomenon of rebound effects. The paper originates from an interview with the Principle Investigator, Dr Karen Turner (University of Stirling, formerly of the University of Strathclyde) by Maggie Koerth-Baker, a science journalist working on a book for Wiley & Sons about the future of energy in the United States. The following is not a precise transcript of that interview; rather it picks out and develops key issues from the questions posed and the answers given.