Reducing rebound without sacrificing macroeconomic benefits of increased energy efficiency?

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Increased efficiency in the use of energy will trigger a series of price and income effects that result in cost-push or demand-led economic expansionary processes (depending on whether efficiency improves on the production or consumption side of the economy). However, the same set of processes will also generate rebound in energy use at the economy-wide level, acting to partially offset expected energy savings in the more efficient activity. The question then arises as to whether rebound is a necessary ‘evil’ that we must accept in order to enjoy economic gains of increased energy efficiency. Or, are the possibilities for expansion due to increased efficiency limited if we wish to maximise energy (and related emissions) savings? Or, can economy-wide rebound effects from increased energy efficiency be reduced without sacrificing macroeconomic benefits? We hypothesise that this may be possible if we focus on energy-using service needs and consider increased efficiency in the production/delivery of a less energy intensive competitor in the household consumption choice. That is, by changing the composition of consumption - here with focus on the demand of UK households for mobility and increasing the energy efficiency and attractiveness of less energy intensive (per person mile) public over private transport options - the net economic welfare gains of increased energy efficiency may preserved while reducing associated rebound effects.
Original languageEnglish
Number of pages2
Specialist publicationIAEE Energy Forum
Publication statusPublished - 25 Jul 2016


  • macroeconomics
  • energy efficiency
  • economic growth
  • rebound effects


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