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Thu Jan 24, 2013, 12:17 PM

The 'rebound' effect of energy-efficient cars overplayed

http://www.news.ucdavis.edu/search/news_detail.lasso?id=10473
The 'rebound' effect of energy-efficient cars overplayed

January 23, 2013

The argument that those who have fuel-efficient cars drive them more and hence use more energy is overplayed and inaccurate, a University of California, Davis, economist and his co-authors say in a comment article published Wednesday in the journal Nature.

Critics of energy efficiency programs in public policy debates have cited the “rebound effect” as a reason that hybrid cars and plug-in electric vehicles, for example, don’t really save energy in the long run.

The “backfire” concept, a more extreme version of “rebound,” actually stems from a 19th century analysis in a book titled “The Coal Question,” by Stanley Jevons. The book hypothesized that energy use rises as industry becomes more efficient because people produce and consume more goods, according to the Nature article. But the article’s co-authors found that in the modern economy, the effect is not supported empirically.

“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. But evidence points to these effects being small — too small to erase energy savings from energy efficiency standards, for example,” said David S. Rapson, assistant professor of economics at UC Davis.

http://dx.doi.org/10.1038/493475a

24 replies, 2179 views

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Arrow 24 replies Author Time Post
Reply The 'rebound' effect of energy-efficient cars overplayed (Original post)
OKIsItJustMe Jan 2013 OP
limpyhobbler Jan 2013 #1
OKIsItJustMe Jan 2013 #2
limpyhobbler Jan 2013 #3
NoOneMan Jan 2013 #10
GliderGuider Jan 2013 #11
The2ndWheel Jan 2013 #4
OKIsItJustMe Jan 2013 #6
The2ndWheel Jan 2013 #24
NoOneMan Jan 2013 #9
OKIsItJustMe Jan 2013 #12
NoOneMan Jan 2013 #14
OKIsItJustMe Jan 2013 #17
NoOneMan Jan 2013 #18
OKIsItJustMe Jan 2013 #19
NoOneMan Jan 2013 #20
OKIsItJustMe Jan 2013 #21
NoOneMan Jan 2013 #23
GliderGuider Jan 2013 #5
OKIsItJustMe Jan 2013 #7
GliderGuider Jan 2013 #8
OKIsItJustMe Jan 2013 #13
GliderGuider Jan 2013 #15
NoOneMan Jan 2013 #16
madokie Jan 2013 #22

Response to OKIsItJustMe (Original post)

Thu Jan 24, 2013, 12:34 PM

1. I guess we should try to make sure that any money savings from cheaper energy

are captured used to fund clean energy, conservation, and adaptation projects. We have to make our governments enforce that with policies.

That way if there is any rebound effect, we cancel it out.

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Response to limpyhobbler (Reply #1)

Thu Jan 24, 2013, 12:39 PM

2. True belivers in “Jevons’ Paradox” will tell you that such efforts would fail

“Jevons’ Paradox” tells them that any effort to conserve inevitably leads to more consumption.

In their minds, it is a natural law, much like gravity.

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Response to OKIsItJustMe (Reply #2)

Thu Jan 24, 2013, 01:09 PM

3. It seems like more of an abstract philosophy question that a real world problem.

There are some interesting similar real world issues.

What if somebody saves $100 a month with their new fuel efficient car? So now they decide to buy that new Hummer. Someone else might decide to use the money to insulate their home. Someone else could invest it in the stock market or hand control of their money over to a financial planner who will look for the most profitable investment.

It's not a natural law, but individuals do not necessarily make wise decisions with their share of the money savings that flow from better fuel economy. That's why the government should make sure to capture that new surplus generated by increased efficiency, and spend it on stuff that makes sense. Like home insulation instead of Humvees.


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Response to limpyhobbler (Reply #3)

Thu Jan 24, 2013, 03:18 PM

10. "It's not a natural law..."

 

Not a bit. Its an explanation of a counter-intuitive phenomenon in a complex human system after observing an event at the emergence of the industrial revolution. An explanation that seems to fit to other situations after its been applied, and has "evolved" for our modern economy into the Khazzoom–Brookes postulate. These notions are considered poisonous heresy to the technophile's religious doctrine, as it suggests their faithfully beheld ideas in techno-salvation may not come to pass.

This cult adheres to the notion that we must unquestionably "progress" until we reach some magic Taoist-like point where we suddenly start consuming less energy. This faith-based view creates vehement objections to the suggestion that systems are complex, ever-growing and have unintended consequences we should thoroughly explore. Religions do not like exploring ideas that contradict their core tenants.

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Response to NoOneMan (Reply #10)

Thu Jan 24, 2013, 03:42 PM

11. Preach it, brother!

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Response to OKIsItJustMe (Reply #2)

Thu Jan 24, 2013, 01:34 PM

4. As long as there are people with unfulfilled needs and wants

we're going to consume more, as long as we have the ability to potentially fulfill those needs and wants. As a society, we force ourselves to help everyone we can. Or at least want to try to help everyone we can.

It's not inevitable, and not a natural law, but as long as we have the idea that everyone has just as much right to potentially acquire anything that anyone has available to them, it might as well be an inevitable natural law.

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Response to The2ndWheel (Reply #4)

Thu Jan 24, 2013, 01:47 PM

6. And there we have it! (A true believer!)

“It's not inevitable, and not a natural law, but … it might as well be an inevitable natural law.”

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Response to OKIsItJustMe (Reply #6)

Fri Jan 25, 2013, 09:46 AM

24. Thanks for taking out my qualifying statements to make your point

There wasn't really a reason to increase the efficiency of my post, but you did, and you got more mileage out of it.

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Response to OKIsItJustMe (Reply #2)

Thu Jan 24, 2013, 03:07 PM

9. No energy has yet been conserved. In this example we just have more consumption

 

You cannot disprove Jevon's if your reference to it is based on false premises (like ignoring the costs of production of hybrids and electric cars)

BTW, you are aware this paradox has evolved into a more modern postulate; but you are fixated on this one. Why?


energy efficiency improvements that, on the broadest considerations, are economically justified at the microlevel, lead to higher levels of energy consumption at the macrolevel.

Firstly, increased energy efficiency makes the use of energy relatively cheaper, thus encouraging increased use. Secondly, increased energy efficiency leads to increased economic growth, which pulls up energy use in the whole economy. Thirdly, increased efficiency in any one bottleneck resource multiplies the use of all the companion technologies, products and services that were being restrained by it.


http://en.wikipedia.org/wiki/Khazzoom%E2%80%93Brookes_postulate

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Response to NoOneMan (Reply #9)

Thu Jan 24, 2013, 04:57 PM

12. How about addressing the Nature article linked to by the OP?

http://dx.doi.org/10.1038/493475a


Macroeconomic rebound effects are hard to pin down, but simple economic theory sets a limit. Standard assumptions linking supply and demand suggest that 'backfire' due to the price effect is impossible: if global demand for oil falls, the oil will become cheaper, so the incentive to produce it will be reduced. Less oil will be used overall, even though the cost is lower.

Complicated sums
The four rebound effects cannot simply be added together to give the combined effect, because the presence of one may erode others. For example, when both the direct and indirect apply, the result is less than the sum of the two because any direct rebound effect decreases the amount of money available to spend elsewhere. Macroeconomic models estimate total combined rebound effects to be in the range of 20–60%.

In sum, rebound effects are small and are therefore no excuse for inaction. People may drive fuel-efficient cars more and they may buy other goods, but on balance more-efficient cars will save energy.

Energy-efficiency measures should be on the policy menu to curb energy use and to address global warming. Stricter energy-efficiency legislation should be considered across all sectors, alongside options that are not subject to rebound effects, such as carbon pricing.

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Response to OKIsItJustMe (Reply #12)

Thu Jan 24, 2013, 05:27 PM

14. I did. Its based on a false premise

 

That being: energy is conserved by producing, purchasing, and utilizing this new generation of efficient vehicles.

In addition, its arguing about an antiquated red herring. It would be much more useful for them to take on the more modern postulate:

Firstly, increased energy efficiency makes the use of energy relatively cheaper, thus encouraging increased use. Secondly, increased energy efficiency leads to increased economic growth, which pulls up energy use in the whole economy. Thirdly, increased efficiency in any one bottleneck resource multiplies the use of all the companion technologies, products and services that were being restrained by it.


What they are trying to do is incite action by poking holes in an archaic--and flawed--explanation of an unintended consequence of a complex system. This doesn't mean that unintended consequences still do not exist; IOW, if Jevons 19th Century view is not totally accurate in our current context, it doesn't prove by contradiction that innovation & production driving economic growth will inevitably lead to less energy consumption. It just proves some grad students have more free time than ability to think abstractly.

In any case, whatever its impact may be, the system will take notice of the new conditions and evolve to grow & consume energy the quickest. Whatever paradox, postulate, theory, etc, that it takes to accurately describe that objectively observable trend, that is what the technophiles need to focus on shooting down on their pathway to Utopia.

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Response to NoOneMan (Reply #14)

Thu Jan 24, 2013, 05:39 PM

17. Did you actually read the Nature article?

Did you check out any of the references?

Like:
http://dx.doi.org/10.1007/s12053-009-9053-y
Energy Efficiency
November 2009, Volume 2, Issue 4, pp 411-427

The macroeconomic rebound effect and the world economy
Terry Barker, Athanasios Dagoumas, Jonathan Rubin

Abstract

This paper examines the macroeconomic rebound effect for the global economy arising from energy-efficiency policies. Such policies are expected to be a leading component of climate policy portfolios being proposed and adopted in order to achieve climate stabilisation targets for 2020, 2030 and 2050, such as the G8 50% reduction target by 2050. We apply the global “New Economics” or Post Keynesian model E3MG, developing the version reported in IPCC AR4 WG3. The rebound effect refers to the idea that some or all of the expected reductions in energy consumption as a result of energy-efficiency improvements are offset by an increasing demand for energy services, arising from reductions in the effective price of energy services resulting from those improvements. As policies to stimulate energy-efficiency improvements are a key part of climate-change policies, the likely magnitude of any rebound effect is of great importance to assessing the effectiveness of those policies. The literature distinguishes three types of rebound effect from energy-efficiency improvements: direct, indirect and economy-wide. The macroeconomic rebound effect, which is the focus of this paper, is the combination of the indirect and economy-wide effects. Estimates of the effects of no-regrets efficiency policies are reported by the International Energy Agency in World Energy Outlook, 2006, and synthesised in the IPCC AR4 WG3 report. We analyse policies for the transport, residential and services buildings and industrial sectors of the economy for the post-2012 period, 2013–2030. The estimated direct rebound effect, implicit in the IEA WEO/IPCC AR4 estimates, is treated as exogenous, based on estimates from the literature, globally about 10%. The total rebound effect, however, is 31% by 2020 rising to 52% by 2030. The total effect includes the direct effect and the effects of (1) the lower cost of energy on energy demand in the three broad sectors as well as of (2) the extra consumers’ expenditure from higher (implicit) real income and (3) the extra energy-efficiency investments. The rebound effects build up over time as the economic system adapts to the higher real incomes from the energy savings and the investments.



(Summary: There is a “rebound effect,” however, it is not 100%, let alone greater than 100%.)

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Response to OKIsItJustMe (Reply #17)

Thu Jan 24, 2013, 05:54 PM

18. This paper is akin to analyzing genetic drift in unicorn populations

 

We are going to continue producing things, accelerating the rate of that production, disposing of existing things, increasing wealth accumulation to purchase things we produced and growing the overall economy (and hence standard-of-living and ability to consume energy) through all this production. What "rebound" may or may not happen on the end-user/consumer side is simply one component of an observably ever-growing, ever-consuming economic machine--a component which the machine will notice, if significant, and evolve to offset.

IOW, maybe our conventional models are flawed

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Response to NoOneMan (Reply #18)

Thu Jan 24, 2013, 05:58 PM

19. So, is that a yes?

Once again, show me numbers which support the notion of a rebound effect which exceeds 100%.

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Response to OKIsItJustMe (Reply #19)

Thu Jan 24, 2013, 06:06 PM

20. I don't think you understand that I am not arguing about the red herring

 

I am stating that despite what may or may not happen in terms of an economy adjusting to efficiency innovations, we are going to continue to grow and produce such a fuckload of things the trend will be quite clear.

Put simply, as long as the tool monkeys keep consuming energy and raping the earth at an accelerated rate, it doesn't matter how clever they are in the process--acceleration implies implicitly more at every point as t approaches infinity.

We don't need to argue about the details. The system will work it out for us.

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Response to NoOneMan (Reply #20)

Thu Jan 24, 2013, 06:29 PM

21. Once again, you need to start somewhere

There is a large group of people who point to “Jevons’ Paradox” to “prove” that energy conservation is counter-productive.

There is also a large number of people who would like to use more energy per capita than they are presently using (e.g. the Chinese.)

Now, you can wave your hands, and shout “Look at all the coal they’re using!” or you you can be grateful that they’re adopting renewables faster than we have in “the West.”

http://www.solidiance.com/whitepaper/china-renewable.pdf


The Importance of Renewable Energy to China

The use of renewable energy is an increasingly hot topic and important issue in China.

In the face of the problems of climate change, greenhouse gas emissions and oil prices rising, the public has come to realize the importance of developing renewable energy. More and more people opt for green travel or low-carbon life-styles and the public media has been increasing its coverage and publicity of the development of low carbon technology and renewable energy.
– Liu Mingliang, Analyst, China Wind Energy Association


According to Solidiance analysis, there are 3 key drivers behind the continued interest in renewable energy in China:
  1. China’s increasing demand for electricity.
  2. China’s need to reduce its reliance on coal for energy production
  3. China’s need to reduce its greenhouse gas emissions.

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Response to OKIsItJustMe (Reply #21)

Thu Jan 24, 2013, 07:35 PM

23. "There is a large group of people who point to..."

 

Who are these people? Do they have a name for their group? Any cool logos? Are you sure?

It seems like there are a large group of people who poke holes at a 19th century observation to prove via contradiction we will one day consume less energy. That is a fallacious assertion that is inconsistent with all data we have on the matter.

Jevon's paradox (and Khazzoom–Brookes postulate) isn't a law. Its not meant to prove anything--that's what stats are for after we fuck up. Instead, its an explanation of contradictory, unintended consequences of action in a complex system (and evolving system, that now has future markets and all sorts of interventions). Invoking it is a way to say "are you sure that is going to work?" or "that isn't what's been happening so far" to the faith-based masses that drive consumption forward

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Response to OKIsItJustMe (Original post)

Thu Jan 24, 2013, 01:35 PM

5. Invoking Jevons misses the point

and sends the conversation down an unproductive rabbit-hole.

The main purpose of energy-efficient cars (in my new opinion) isn't to "save" energy - it's to enable continued travel in the context of rising oil prices.

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Response to GliderGuider (Reply #5)

Thu Jan 24, 2013, 01:51 PM

7. Except, that /it is all about Jevons…/

Shockingly, energy efficiency does save energy.


However, regarding your tangent from Jevons, (although ““the people I know’ make a poor statistical sample”) most of the people I know who have bought hybrids, have done so primarily out of concern for the environment.

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Response to OKIsItJustMe (Reply #7)

Thu Jan 24, 2013, 02:44 PM

8. I do things out of a wide variety of personal concerns

And yes, environmental concern/morality makes a good sales pitch. However, customers' concerns don't (necessarily) represent the underlying intent of the system. We have to be careful to distinguish the sales pitch from the intent of the seller.

The point of making things more efficient is to allow the whole system to keep growing. Take the energy intensity of world GDP - it has improved by a factor of two since 1950. In the same period energy consumption has tripled, and GDP has gone up by a factor of 10.

Efficiency is a growing system's way of evading energy limits. How one sells it is quite another matter.

The Jevons Paradox has been a poorly thought out red herring from the beginning. Stanley shared the common inability to recognize what he was seeing.

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Response to GliderGuider (Reply #8)

Thu Jan 24, 2013, 05:07 PM

13. “The point of making things more efficient is to allow the whole system to keep growing.”

This is an article of faith for you, but not necessarily true.

We might also conclude that “The point of making things more efficient is to allow the whole system to” retain some sort of parity.

i.e. “More efficient cars will allow us to continue to commute as far as we did last year.” rather than “More efficient cars will allow us to commute further than we did last year.”


However, as perverse as it may seem, perhaps, just perhaps, efficiency truly does result in conservation, and that is the point.

http://www.eia.gov/consumption/reports/early_estimates.cfm

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Response to OKIsItJustMe (Reply #13)

Thu Jan 24, 2013, 05:30 PM

15. It's not simply an article of faith.

H.T. Odum came up with the underlying idea in the late 1970s: "During self-organization, system designs develop and prevail that maximize power intake, energy transformation, and those uses that reinforce production and efficiency."

One of the implications of that insight is this. If self-organizing complex adaptive systems (of which human societies and civilization as a whole are canonical examples) do maximize their power intake and energy transformation, then one of the ways they will adapt in order to do that is to become more efficient. Efficiency reduces the power requirement of one part of a system so that energy can be shifted to other parts that are under-supplied, or be applied to the growth of the system as a whole.

A human example of this is making American coal plants more efficient and then exporting the coal that is spared to China to produce power there.

If you see an example that appears to demonstrate energy conservation through efficiency, I invite you to ask where the energy that is spared in that operation ends up? Does it stay unused or is it used for other things in other places? I suggest that you may have a bit of "boundary blindness" that can be alleviated by understanding the system in a larger context. There is after all a global market for goods, services and energy, so looking at single-industry or national statistics will tell you very little about how the whole thing works.

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Response to OKIsItJustMe (Reply #13)

Thu Jan 24, 2013, 05:32 PM

16. "This is an article of faith for you, but not necessarily true."

 

It is what is happening. In reality. Consumption and growth are ever increasing. Some people are trying to understand why. What rules of our "game" are making it so.

Faith is believing that we can do the same things (production) and the system will suddenly shift course. That is faith because it hasn't happened. Sure, yes, its counter-intuitive. Its a "paradox". Its something beyond illustrating with tidy equations. But its what is happening.

Its like you want to assure us to have faith in technological production to finally buck the system's trend. It could maybe. But we have less of a reason to believe it will than to think the past trends will continue to repeat.

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Response to OKIsItJustMe (Original post)

Thu Jan 24, 2013, 07:12 PM

22. At the age of 60

for my wife and soon to be 65 for me I can assure them that we don't drive a single mile more than is absolutely necessary.
Our next car will be a good gas mileage ford is all I know

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