Does efficiency matter?

This, apparently, is the reason everyone's driving so much.

A New York Times article this morning is the latest to weigh in on the “rebound effect” of energy efficiency.

The argument, basically, is that as our household appliances and lighting become more energy efficient, rather than use less energy, we just buy more lights and gadgets because we can afford to power them. The Times points to a study that found we spend the same proportion of our income on lighting now as we did in 1700, even though the cost of lighting has dropped dramatically.

This phenomenon, as you may know, is commonly referred to as the Jevons Paradox, named after 19th-century British economist.

A similar article appeared in the New Yorker in December, which was subsequently torpedoed by Michael Levi of the Council on Foreign Relations. Levi notes that a major failure of these “rebound effect” arguments is that they fail to account for economic growth:

…my guess is that the spread of air conditioners (as well as cars and other such things) is driven mainly by the facts that people have more money to spend and that the devices are cheaper. The reduced cost of fueling them, I suspect, is a distant third.

Kiera Butler of Mother Jones explored the same issue yesterday, looking at a correlation between fuel efficient cars in Sweden and increased emissions:

…the rise in emissions happened in spite of green vehicles, rather than because of them. One reason is that trucks, not passenger cars, are causing the bulk of new emissions, since Swedes have recently begun trucking goods instead of transporting them by rail.

Another factor is the high price of gas in Sweden: In the US, gas is so cheap that fuel efficiency isn’t likely to make a giant difference in the price of driving. In Sweden, it does. Also, Sweden has a very strange tax incentive that makes it easy for companies to give their employees fuel-efficient cars. Since fuel and maintenance are often subsidized by the company, “People drive these cars much more than they would a non-company car,” says Schipper. It’s even conceivable that the company-car phenomenon has lured people away from Sweden’s excellent public transportation system.

Correlation, meet causality.

Also, let’s consider the examples of successful efficiency programs we looked at yesterday. Is a city government with a budget hole or a school district that’s laying off teachers going to turn around and squander its energy savings by cranking up the thermostat?

This is not to say that the “rebound effect” hasn’t, or won’t, happen. But it shouldn’t be used as an argument against efficiency efforts in general, because not all efficiency efforts are equal.

The Breakthrough Institute, cited in the Times piece as warning of the “real and significant” impact of the Jevons Paradox, argues strongly in favor of energy efficiency programs:

In any case, truly cost-effective energy efficiency measures should be vigorously pursued, as they will lead to an improvement in general welfare (at least narrowly construed in economic terms). However, from a climate mitigation perspective, we must be keenly aware of the precise, macroeconomic impacts of energy efficiency improvements, since only a reduction in total aggregate energy consumption will directly contribute to emissions reduction objectives.

For further reading (if you’re so inclined), The Rocky Mountain Institute has a breakdown of various writers’ positions on the “rebound effect.”

Photo by nikoretro via Creative Commons

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