The Rebound Effect: Does Energy Efficiency Actually Lead to More Energy Use?

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By Elisa Wood

You’re about to buy a computer, and you see that newer models are more energy efficient than your old one. That’s great news! Now you can leave it on all night, saving the bother of powering it up in the morning. Maybe you’ll end up using a few more watts, but who’s counting?

Maybe no one – but perhaps someone should.

This phenomenon – the idea that it’s okay to use an appliance more if it is efficient – is known as the rebound effect. And it’s worrying economists and clean energy advocates.

The rebound effect can take many forms. When I shop for a new refrigerator, I may find that the newer, more efficient models are much cheaper to operate than my old unit. So I decide to buy a bigger model. Or perhaps I insulate my house and use the money saved on home heating to take a vacation. I gobble up any energy I saved – and even more – by taking a plane ride.

Critics of efficiency programs point to the rebound effect to argue that efficiency does not get the bang for the buck claimed.

But how great is the rebound effect? We asked the Alliance to Save Energy. Steve Capanna, senior research associate, directed us to a 2005 International Energy Association paper that says about 10% to 20% of the energy saved by an efficiency measure is lost due to increased consumption.

Does this mean efficiency is not worth pursuing? No, ASE points out you still have achieved an energy savings of 80% to 90%. So the glass is not half-empty, but in fact more than half full.

Still, the rebound effect cannot be ignored, particularly since energy companies increasingly convert their energy savings into carbon dioxide emissions reductions. If they do not calculate the efficiency savings accurately, carbon emissions reductions figures will be askew.

This is a serious worry, particularly since the rebound effect may be more deeply imbedded in the economy than we think. For example, Chris Goodall, author of the book, How to Live a Low Carbon Life, says that “better economy-wide energy efficiency (through, say, improvements in steel-making technologies) may encourage more rapid economic growth, which in turn raises energy use.” (

While critics may overstate the rebound effect, clearly the efficiency industry cannot ignore it. The US begins its first carbon emissions cap- and-trade program in 10 states next year, and a national carbon restriction program is likely to soon follow. Carbon reduction claims will undergo increasing scrutiny. Data must be highly accurate.

The credibility of the energy efficiency industry depends upon it keeping as much bounce as possible out of the rebound effect – or, at the very least, remembering to consider the effect when declaring energy savings.

Visit energy writer Elisa Wood and subscribe to her free Energy Efficiency Markets Newsletter at

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About Elisa Wood

Elisa Wood is the chief editor of She has been writing about energy for more than three decades for top industry publications. Her work also has been picked up by CNN, the New York Times, Reuters, the Wall Street Journal Online and the Washington Post.