The Rebound Effect: Balancing Energy Efficiency and Conservation

Energy savings has continued to dominate the conversation within the global energy ecosystem due to its economic and environmental ramifications, generating diverse opinions among stakeholders on the most effective approach that guarantees minimal carbon footprint and financial cost.  

One key component of global climate action that has gained widespread acceptance is the adoption of energy-efficient technologies, including equipment, devices, and appliances, to reduce overall energy consumption. This is called the ‘ Energy Efficiency Approach’. However, several research has shown that gains in energy efficiency is often followed by greater energy demand, meaning some of the anticipated energy savings may be “taken back”—a phenomenon known as the rebound effect. 

Take, for instance, individuals who transition from traditional light bulbs to energy-efficient alternatives. They may become accustomed to leaving lights on in unoccupied rooms, relying on the perception that the new bulbs consume less energy, just as people who install insulation or heating pump have the tendency to run their heaters more. Similarly, when individuals switch to energy-efficient cars, they may find themselves driving more frequently. These behavioural shifts inadvertently counteract the intended energy-saving measures, resulting in increased energy consumption. 

The rebound effect has garnered significant attention from both the global climate and economic communities. In a comprehensive literature review conducted by the American think tank, The Breakthrough Institute, it was concluded that the rebound effect could have a substantial impact at an economy-wide level. According to the lead author, Jesse Jenkins, the effect is profound: "For every two steps forward we take with below-cost efficiency, rebound effects mean we take one or more steps backwards, sometimes enough to completely erode the initial gains made." 

A study by sustainable energy policy experts Dr. Paul Brockway and Prof. Steve Sorrell revealed that the rebound effect could potentially reduce gains from improved energy efficiency by as much as 71%. Additionally, a surprising discovery emerged from a study that examined the long-term impact of loft and cavity wall insulation in England and Wales, revealing that the reduction in gas consumption per household was minimal, with all energy savings disappearing by the fourth year after installation.  

Multiple research projects warn against the over reliance on the ‘Efficiency Approach’ in global climate action, given the risk that anticipated benefits may not materialize. This raises a pressing question: How can we effectively address the rebound effect? 

Several energy researchers advocate for combining Energy Efficiency with Energy Conservation, emphasizing the importance of both approaches. While Energy Efficiency focuses on using energy-saving technology, Energy conservation involves managing energy consumption through actions such as unplugging electronics when not in use or turning off lights when leaving a room.  This is where nudging can play a critical role, promoting habits that lead to sustainable energy conservation. It perfectly aligns with our ongoing behavioural change advocacy at Nudge Display. 

In our earlier article titled ‘Sustainable Energy Use: Exploring Habitual Energy-saving Behaviours’, we underscored the significance of cultivating energy-saving habits for sustainable living. By consciously making choices and integrating energy-saving practices into our daily routines, we can effectively mitigate the impact of the rebound effect. 

Join us in the journey towards building a greener future as we make these little adjustments one step at a time. 

Can we leave energy-efficient bulbs on when not needed? Or keep a window open because the house is well-insulated?