Energy efficiency and consumption — the rebound effect — a survey

Technology policies are one of the options available for the reduction of carbon emissions and the usage of energy. However, gains in the efficiency of energy consumption will result in an effective reduction in the per unit price of energy services. As a result, consumption of energy services should increase (i.e., “rebound” or “take-back”), partially offsetting the impact of the efficiency gain in fuel use. Definitions of the “rebound” effect vary in the literature and among researchers. Depending on the boundaries used for the effect, the size or magnitude of this behavioral response may vary. This review of some of the relevant literature from the US offers definitions and identifies sources including direct, secondary, and economy-wide sources. We then offer a summary of the available empirical evidence for the effect for various sources. For the energy end uses for which studies are available, we conclude that the range of estimates for the size of the rebound effect is very low to moderate.