Our good friends over at The Breakthrough Institute have a new report out on the rebound effect – the idea that as energy efficiency increases, we use part of the savings we make to consume more energy, and overall the impacts of energy efficiency are much less than we think. This comes on the heels of Steve Sorrell’s excellent review of the subject in 2009.
There is plenty of evidence that the rebound effect is real. But it would be a mistake to jump to the conclusion that this means it is impossible to reduce energy intensity (energy used per $ of GDP) substantially or that energy use will always grow (especially in mature economies). Despite the fact that the UK economy is almost two and half times bigger than it was in 1970, the UK now uses almost exactly the same amount of energy in total as it did then. Some of this may be due to the decline of heavy industry, but not all – the value of manufacturing output before the financial crisis was actually about twice what it was in the late 1970s.