What Are The Policy Implications of the "Rebound Effect"?

What Are The Policy Implications of the "Rebound Effect"?

What Are The Policy Implications of the "Rebound Effect"?

Moneybox
A blog about business and economics.
Jan. 30 2012 3:37 PM

What Are The Policy Implications of the "Rebound Effect"?

1327955832252
Rebounding makes all the difference in basketball, as Kevin Love fans know.

Wikipedia photo.

I wrote a bit last week about worries that the "rebound effect" whereby greater energy efficiency leads in part to greater energy use may mean that estimates of the ecological benefits of efficiency measures are overstated. Something I wanted to add to this is suggested by David Roberts today, namely that I'm not sure recognizing the reality of rebound effects says much about the merits of efficiency-promoting policies. That's because to the extent that efficiency's ecological gains are undermined by rebounds, that implies that the efficiency is having a huge positive impact on people's living standards.

Recall that the rebound effect is strongest in poor countries. Truly poor people in poor countries, in other words, are really income-constrained in terms of how much energy they can use. If cooking fuel is very expensive relative to your income, for example, you might forego boiling drinking water even though that would be safer. If more efficient cooking methods are introduced, it's unlikely that a family in that position would simply continue living the same dangerous energy-starved lifestyle as before but with fewer CO2 emissions. Instead they're likely to take advantage of reduced fuel costs to do more cooking, sterilizing their water properly. This is inconvenient from a pure climate policy perspective, but counts nonetheless as a humanitarian boon. It would be strange to poo-poo the benefits merely on the grounds of rebound.