Published on: January 28, 2013
While most people can see the benefit of using less to do more, researchers at the University of California at Davis recently published a study showing that energy efficiency is not just an excuse to use more energy at the same cost.
To hear some people tell it, energy efficiency isn’t so much a solution as a way to change the problem.
Some economists and public policy researchers insist that something called the “rebound effect” tends to negate the benefits of energy efficiency. In effect, because people are spending less to do what they need to, they can feel justified in being a bit more wasteful.
Usually, this principle is applied to cars, with proponents insisting that fuel-efficient cars, hybrids and plug-in electrics just encourage drivers to use their cars more frequently. But the idea works just as well when you’re talking about small business energy costs, home heating or any number of other energy needs.
Assistant professor of economics David Rapson, however, argues that the principle is deeply flawed.
“If a technology is cheaper to run, people may use it more. If they don’t, they can use their savings to buy other things that required energy to make,” Rapson explained. “But evidence points to these effects being small — too small to erase energy savings from energy efficiency standards, for example.”
The idea dates back to a book on coal usage from the 19th century, but, whether it was true back then or not, it doesn’t seem to fit the data today.
The evidence suggests, according to Rapson, that energy efficiency can be an effective way to control greenhouse gas emissions and overall energy demand, but the impact on consumers could also be important.
Obviously, being able to do more with less is ideal for a business even if it doesn’t mean an overall reduction in energy demands. But knowing that the rebound effect really isn’t all that significant should reassure you that your investments in insulation and other types of efficiency aren’t just going to lead to people cranking up the thermostat.
The same idea applies to residential energy efficiency, where cutting down on overall bills is usually the real end goal. Clearly, you have to take responsibility for your own energy management, but don’t take it for a given that energy efficiency can’t save you money just because you’re bound to want to crank up the heat, or run the air-conditioner longer.
