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Does Increased Energy Efficiency Just Spark Us to Use More?

The views expressed are those of the author and are not necessarily those of Scientific American.

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chevy-volt-fuel-economy-stickerLast year, the U.S. raised its fuel economy standards for cars and trucks for the first time in decades. By 2025, the fuel efficiency of vehicles will be required to double. As a result, oil consumption is predicted to fall and—given that the U.S. remains the world’s largest consumer of oil—global crude prices might fall as well. That makes using oil cheap again, encouraging yet more consumption that ends up reducing the energy saving impact of the initial policy.

That is the story of the so-called “rebound effect,” more properly called Jevons paradox, after W. Stanley Jevons, the British economist who first proposed it in his 1865 book “The Coal Question.” Jevons paradox is undoubtedly real and has to be considered in any energy efficiency policy. After all, the last time the U.S. raised its fuel economy standards significantly in the late 1970s, global oil prices cratered not too long thereafter in the early 1980s. Or consider the refrigeration paradox: freezers have become better and better at using less energy to keep food cold. As a result, many Americans now have two: a modern, efficient one in the kitchen for comestibles and the old fridge in the garage or basement to keep the beer cold and freeze extra supplies.

But, although the rebound effect may be real, it is “too small to derail energy-efficiency policies,” argues a team of four economists in a comment published in Nature on January 24. (Scientific American is part of Nature Publishing Group.) Using data from the Energy Information Administration’s annual forecast, the researchers estimate that the rebound effect will reduce energy savings from the new fuel efficiency standards to 5 percent from 7 percent.

The economists take care to note the distinction between direct and indirect effects. So, for example, savings on fuel leads to an increase in driving, eliminating nearly a third of the efficiency savings. At the same time, money not spent on fuel is then often spent on other items that in turn require energy to produce—causing an indirect drop of five to 15 percent. Finally, at the scale of the national and global economy, oil not used in cars in the U.S. will be used in cars in China, along with other displacement effects.

Lumping all these factors together, the economists estimate that “total combined rebound effects [are] in the range of 20-60 [percent].” They add: “in sum, rebound effects are small.” Only an economist could argue that 60 percent is small.

Consider another modern tale: in the 1960s computing was confined to energy-hogging mainframes to which only a few people had access. Today, billions of people on the planet have much more energy efficient laptops, desktops or smartphones and rely on the constant processing power of rack after rack of servers for services such as Internet search or email. As energy efficiency researcher Harry Saunders observed in an interview with The Breakthrough Institute: “The total energy use for computing is probably at least an order of magnitude greater,” despite the fact that mainframes individually used more power.

At the same time, individuals often ignore energy efficiency measures—even when they save money—perhaps because of the hassle of changing a light bulb. There is some evidence, however, that tapping into a more primal instinct than savings—competition—can spur individuals to undertake energy efficiency improvements. It can even be as simple as a smiley or frowny face on an electric bill.

Some argue that, over the long-term, the rebound effect actually “backfires” and ends up promoting even more energy use than was saved in the first place. This is the argument Jevons made about coal use and, given global coal consumption trends 150 years later, it’s hard to argue with him. Or consider the rise of the sport-utility vehicle in the 1990s after a decade of low oil prices in the 1980s. Global oil consumption has never been higher.

But efficiency measures do save some energy. California has kept per capita electricity use the same for the last 30 years, despite the proliferation of gadgets, heated swimming pools and air conditioners, among other modern conveniences. In fact, energy efficiency is a much better way of meeting growing demand for power than building a new power plant—as the U.S. economy has grown, efficiency has kept energy use from rising anywhere near as fast. And efficiency can help combat climate change. Consider this: simply switching all Canadian furnaces to the most efficient natural gas ones could cut that country’s (growing) greenhouse gas emissions by 40 percent, according to energy expert Vaclav Smil of the University of Manitoba.

The world requires a lot of power—16 terawatts per year and growing. Most of that power comes from burning fossil fuels and, as a result, the greenhouse gas emissions driving climate change continue to swell—34.7 billion metric tons of carbon and growing. Given that twin challenge, even slowing the rate of growth is a major achievement—and it should be a requirement for any serious effort to combat climate change.


David Biello About the Author: David Biello is the associate editor for environment and energy at Scientific American. Follow on Twitter @dbiello.

The views expressed are those of the author and are not necessarily those of Scientific American.

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  1. 1. alexanderdoran 3:25 pm 01/24/2013

    ” Only an economist could argue that 60 percent is small.”

    Does the author realize that the Jevons paradox occurs when the rebound effect is greater than 100%?

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  2. 2. David Biello in reply to David Biello 3:48 pm 01/24/2013

    Indeed. The many shades of Jevons paradox: from “backfire” to “wow, that really wasn’t much of anything was it?” Regardless, the joke holds…

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  3. 3. sault 5:18 pm 01/24/2013

    Saying that people will just keep driving more and more as their vehicles become more efficient doesn’t make sense. There are so many hours in the day. On top of that, people are getting increasingly fed up with sitting in traffic for more and more of them. Vehicle ownership among the under 30 crowd and urban dwellers is much lower than other cohorts, for example.

    For the longest time, fuel prices didn’t have much of an impact on American drivers (but they did in Europe). It was mostly EXPLODING Saudi oil production in the 80′s that dropped the price of fuel (helping to bankrupt the Soviets in the process!). The growth in oil consumption in the USA over that time had more to do with growing population numbers and the increasing suburbanization and exurbanization around major cities, drawing people farther and farther from work. If fuel economy standards hadn’t been implemented at the time, most of those people would have been driving the 12 mpg land yachts that defined driving in the 60s instead of the 20, 30, or 40+ mpg offerings from automakers available at the time.

    And predicting global crude prices falling in 2030 is quite a gamble. Since global production profiles get murkier as you look farther out into the future, we don’t have a clear picture of remaining reserves in 2030 and where they will be located. While efficiency improvements will bring demand lower than it would have been otherwise, SUPPLY presents much more uncertainty.

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  4. 4. ultimobo 5:31 pm 01/24/2013

    in Australia efficiency measures have led to reduced consumption – with the result that the utility companies have then increased their prices in order to obtain the same revenue – or alternately where there funding is tied to capital investment, they have been busy ‘gold-plating the poles and wires’ (replacing older infrastructure) which irritated consumers until we recently had the hottest day on record, without brownouts.

    The title reminds me of a great book called Traffic – research showing that as roads are made safer, drivers speed up and pay less attention, resulting in more fatalities. Apparently humans seek the edge of excitement/danger, so a road that seems safe only encourages us to drive faster. Put obstacles in, narrow a village street, and share it with pedestrians, and drivers will happily drive at walking pace.

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  5. 5. Rev.Corvette 5:35 pm 01/24/2013

    Yes, alexanderdoran No matter when Any paradox occurs it is so good to hear some of the skewed statistics used by “Economists” presented as the butt of a joke, Thanks David Biello / Scientific American, I get it.

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  6. 6. sethdayal 7:49 pm 01/24/2013

    ” California has kept per capita electricity use the same for the last 30 years, ”

    Yup by outsourcing all its industry.

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  7. 7. outsidethebox 8:24 pm 01/24/2013

    The essential fallacy of this article was revealed in the first paragraph. It speaks of the US still being the largest user of petroleum and then goes on to discuss what will happen in 2025 as the result of tighter CAFE standards. To believe that in 2025 the US will use the % of the world’s petroleum that is uses today is to be, well lets charitably call it, unaware of reality.

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  8. 8. dwbd 8:38 pm 01/24/2013

    Yes, that propensity is definitely true. I replaced all my incandescent light bulbs to CFL’s, but I didn’t replace 100w with “100w equivalent” – I replaced them with 200w equivalent. And where I would leave incandescent turned off, I leave the lower power consumption CFL’s on more.

    With computers energy use per MFLOP or unit computing power has declined enormously, but I keep needing bigger power supplies for my newer computers because I keep getting much more powerful and capable computers.

    With more tight & energy efficient building insulation, people are less concerned about open windows and doors. It’s human nature.

    Vehicle is more fuel efficient -> driving more -> idling more -> air conditioning more.

    So net effect is that increased energy efficiency has a lower payback than a simplistic calculation would give. Not useless but a proper cost/benefit analysis would include an allowance for Jevon’s Paradox.

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  9. 9. phalaris 5:27 am 01/25/2013

    The experience with fridges shows just what busybodying can lead to. I also was forced to run two of them after regulations meant that they had thicker walls leading to less fridge space in the standardised fitted kitchen.

    A straight carbon tax may be more acceptable than having lefties and greenies doing what the love most: telling us how to run our lives.

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  10. 10. Fanandala 5:52 am 01/25/2013

    I would have thought the US is at a saturation point with cars and driving. So the cost of driving should not change the consumption pattern in the US by much. The “surplus” of fuel generated by lower consumption will however be snatched up by China, India and a couple of other emerging countries. And since the amount of cheaply produced oil is running lower, increased production costs will limit any potential price drop.

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  11. 11. Paul_D_Heikkila 11:16 am 01/25/2013

    The state of the economy likely has more of an effect on gasoline consumption than any Jevons effect. Were there a robust economic recovery we would likely take the car out more, or as happened before, get bigger cars and SUVs. As long as Congress keeps holding its breath Americans will keep the car in the garage.

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  12. 12. mipakeli 11:37 am 01/25/2013

    Rebound is real but probably exaggerated as Americans are just getting poorer every year under Obamanomics. Their spending money continues to drop with lower wage increases than inflation. And combined with baby-boomers retiring on little savings they won’t have the funds to drive much as the number of old people grow in relation to the total population. Everyone knows the older you get the less you drive.

    My guess is the switch to more EV’s will have a dramatic impact in the next two decades and offset any frantic increased young people driving more.

    Long live EV’s powered by the sun.

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  13. 13. OgreMk5 1:17 pm 01/25/2013

    In about six months, I’ll probably begin working from home full time. That’s not going to be great energy savings because I have a very short commute anyway, but I’ll be forced to run the house AC more because I can’t work in the house when it’s 80F like I keep it when I’m not home.

    On the other hand, I’m moving to a brand new LEEDS house, which has all the latest and greatest efficiency measures (double pane windows, radiant barrier, attic heat channels, etc). On the third hand, it’s twice the size of my current house and requires two AC units. On the fourth hand, my mother is moving in so we’re reducing the number of houses that we have to heat and cool and run fridges and hot water heaters, etc.

    I could go on and on. The point is that there isn’t going to be a single, simple decision point for any of this. We’re just going to have to look at the long term trends.

    Great new CAFE standards go into effect by 2025. And yet, according to USAtoday, the average age of US autos is 10.8 years. So that 2025 CAFE standard really won’t represent the majority of cars for another 5 years.

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  14. 14. geojellyroll 4:09 pm 01/25/2013

    Excellent perspective in this article and one that those concerned about the environmnet often don’t take into account. Efficiencies, better technologies often ‘increase’ the economic pie.

    A dedicated commuter railroad was put between two cities in my region. did it remove more cars from the road?…no, it increase the economic and social interactions betweeen the cities…more students taking courses , people going to medical specialists, sporting events, etc. in th eother city.

    Another example was , increase in electricity through hydro production. Did it mean less coal use…no, the price of coal locally declined and this made it more economic for the processing of more iron ore…new pig iron production was out competing recycled steel.

    Of course energy efficiency is a positive overall but a larger perspective is often needed.

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  15. 15. geojellyroll 4:14 pm 01/25/2013

    dwdb: “Yes, that propensity is definitely true. I replaced all my incandescent light bulbs to CFL’s, but I didn’t replace 100w with “100w equivalent” – I replaced them with 200w equivalent. And where I would leave incandescent turned off, I leave the lower power consumption CFL’s on more.”

    So true…I plead guilty. When we leave the house we often turn on more lights…and now we keep a light on 24/7 in our downstairs laundry room. I also installed extra lights in my outbuildings.

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  16. 16. CharlieinNeedham 6:58 pm 01/25/2013

    “Finally, at the scale of the national and global economy, oil not used in cars in the U.S. will be used in cars in China, along with other displacement effects.”

    The energy use in China will dwarf that of the US.

    The shift in the source of global warming will be to Asia.

    Meanwhile, doing everything to increase energy efficiency should be implemented.

    The title of this article, “Does Increased Energy Efficiency Just Spark Us to Use More?” is clever. But in good conscience how could we not do it?

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  17. 17. rhodinsthinker 12:04 pm 01/26/2013

    Increasing efficiency never was a solution. We will have to learn to use only incoming solar energy [photovoltaic, thermal, production of weather (winds), and production of organic material]. There’s lots of it. Once we reach the point of living within our energy income, the burning of fossil fuels should drop to zero (a 100% reduction). Then, and only then, will the earth start to recover.

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  18. 18. dwbd 12:11 pm 01/26/2013

    CharlieinNeedham: “…But in good conscience how could we not do it?…”

    Very easy. If it is not cost effective than it is stupid and idiotic to use it. We have limited capital. You have $X to spend. You can reduce emissions or fossil fuel consumption by hundreds of methods. Many energy efficiency methods will cost > 10X more than alternatives. So by using them effectively you are INCREASING emissions & fossil fuel consumption by 9X. That is just plain stupid, and yet our politicians and greenie groups wholeheartedly embrace that very idiotic ideology.

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  19. 19. sault 12:19 pm 01/26/2013

    Re: #17 rhodie,

    The Sun sends us thousands of times more energy than we need. Since we’re not witching away from fossil fuels overnight, adopting measures where we use less of them as the transition to clean energy occurs means that less pollution will get into the environment. Lowering energy consumption also makes the transition to 100% clean energy quicker as well. This all-or-nothing mindset is not practical nor does it move this debate in a productive direction.

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  20. 20. sault 12:35 pm 01/26/2013

    Re #18 dwbd:

    You’re just making this stuff up now…What sort of energy efficiency methods are you talking about and what alternatives are you comparing them to?

    Five seconds looking through Google Scholar and I already found PROOF that you don’t even know what you’re talking about:

    “The results show conventional energy efficiency technologies can be used to decrease energy use in new commercial buildings by 20–30% on average and up to over 40% for some building types and locations. These reductions can often be done at negative life-cycle costs because the improved efficiencies allow the installation of smaller, cheaper HVAC equipment. These improvements not only save money and energy, but reduce a building’s carbon footprint by 16% on average.”

    Again, where are you getting your “information” about energy efficiency? You HAVE to be hearing this nonsense from SOMEWHERE!

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  21. 21. sault 12:42 pm 01/26/2013

    Re: geojellyroll # 14,

    Energy efficiency is good. People interacting and getting what they need with less pollution is good. Lets cut energy waste and clean up the energy supply so that we aren’t saddled with as much pollution for the energy we DO use.

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  22. 22. sault 12:52 pm 01/26/2013

    Re: mipakeli #12,

    Wages have been stagnating compared to inflation for 30 years now. If anything, it was “Reaganomics” that caused the swift decline in wage growth that marked the post-war period until his policies went into effect. Keep in mind that the deregulation, offshoring, cutting services for low- and middle-income people, destruction of labor unions and tax cuts for the wealthy frenzy has continued basically uninterrupted since the early 80′s.

    The only exceptions to wage stagnation were the Internet Boom of the 90′s, the weak growth in 2002 – 2006 that was funded almost entirely by consumer debt and deficit spending, and the recovery of 2009 – 20XX marked by rebounding manufacturing and a small but growing “onshoring” movement.

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  23. 23. dwbd 9:28 pm 01/26/2013

    Sault, dude, you are having reading comprehension problems to add to your difficulties with energy analysis. I’m a big fan of Energy Efficiency and have been much longer than your Greenie buddies who recently jumped on the bandwagon. I have little doubt I’ve done a whole lot more than you have on Energy Efficiency.

    So as I ACTUALLY said, Energy Efficiency can be a waste of money and effectively INCREASES emissions & fuel consumption if it is done according to Sault & Greenpeace’s religious dogma. In some cases Energy Efficiency is a NO-BRAINER, in many cases it is dubious, in a whole lot of instances it is a NUTTY idea.

    As an example, Anderson Cooper yesterday reported on high-speed rail “Energy Efficiency” expenditure in America. $13B over 5 yrs and nothing achieved:

    The only real achievement is a “high-speed” train in Vermont for $52M in subsidies that is mostly empty, with avg 250 passengers/day, takes 9 hrs from New York, vs 5.5hrs by car & 7 hrs by bus.

    So now the big $118B hi-speed rail plan for California has degenerated to a not-so-fast limited speed $68B rail system, loaded with Obama’s Energy Efficiency$, and is seems to be unpopular with potential passengers and will destroy a whole lot of farmland, angering many farmers.

    A good example is LED light bulbs. Run ~$60k per kw of energy savings over using standard CFL, fluorescent, HID or LPS bulbs. Easily 10X greater cost than many other methods. Although there are definitely applications where LED bulbs make good sense, like aircraft warning lights and off-grid applications.

    In industry a common application is pumps & blowers which use restriction to vary flow. It is certainly more efficient to use a frequency drive to vary the flow instead, but they are expensive. In some case it is cost effective, in many cases it isn’t. Sault’s blanket “energy efficiency is always good” ideology is just a way to stupidly increase emissions.

    I have double paned windows and R22 insulation in my home’s walls. So yep, I could put in triple paned windows and I could double wall, remove & trash the siding add foam insulation, Tyvek & new siding and reduce my heating consumption by 10-20% for about $20k. $20k for avg 200-400 watt energy savings is $50k to $100k per avg kwth savings. A ridiculously expensive example of Energy Efficiency. Yet highly promoted by Greenies. Of course building a NEW home with R30 rather than R22 walls MAY BE cost effective.

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  24. 24. dwbd 9:38 pm 01/26/2013

    Another perfect example of energy efficiency is CHP, or combined heat & power. There are thousands of thermal or diesel power plants that could be rigged to supply low grade heat to area buildings. The cost of those systems is very high. In Northern Areas the waste heat is utilized much more often, therefore more cost effective. Utilizing the waste heat also lowers the efficiency of the power plant. So does it pay? Is it cheaper to use other methods? The religious Greenie like Sault says: “damn the costs, Energy Efficiency is ALWAYS good”. The rational person, who knows something about Energy says: “lets evaluate the cost of the project, calculate the full lifecycle, all things considered, energy savings as a unit energy saved per $ spent and compare that with other alternatives. If other alternatives are more cost effective – then let’s do those instead.”

    Giant Energy Efficiency failure in Ontario:

    $36M spent but virtually no Energy Savings. Greenie madness unleashed.

    Another case is EV’s. Now I’m a big fan of Electrification of Transport. But to trash an ICE vehicle and replace it with a $40k EV which will save maybe an avg 1 gal or 37kwh/day in fuel thermal energy or 1.5 kwth avg. So that is $40k/1.5 = $27k per avg kwth saved. You can certainly build a Nuclear Power plant, even at USA inflated First-Of-A-Kind prices for $2.5k per kwth avg emissions avoided. At > 10X lower cost. Now if you are talking about instead of buying a brand new ICE vehicle, getting a brand new EV, at a $5k cost premium. Than you may be more like $3.3k per kwth avg emissions avoided. On top of that encouraging a new infrastructure and industry – yes that is more reasonable.

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  25. 25. Merrywheels 1:31 pm 01/30/2013

    Interesting concept with credible assumptions to ponder; however, in years of experience with humans they too late change after reaching a point of intolerance (sitting in traffic, paying high bills, etc).

    In listening to the “pros” of Hydrofracturing, we’re hearing how ‘cheap’ our utilities will be, without a whit of awareness of the implications and potential risks to everyone and the earth. The mention of “oversight,” or “regulations” is simply rejected, and shall be until all sides are presented upon which people can decide.

    Good work, Biello (we’re trying to reach you for a panel discussion).

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  26. 26. sofistek 2:43 am 02/1/2013

    If energy efficiencies decrease costs, then the savings are bound to go into using energy in other ways. That is surely a no-brainer. So the only way energy efficiencies will actually result in lower (or significantly lower) energy consumption is for them not to result in savings. With finite resources, that will eventually happen but not because anyone planned it that way.

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  27. 27. disdaniel 3:14 pm 02/1/2013

    We can just wait 12 years and see if in 2025 the average American who buys a new car drives twice as far as they did in 2010 (or whatever year was the baseline for EPA) as a result of better mileage. Or alternately Americans would need to buy twice as many cars and drive each of them an equal distance (as the average in 2010), or some combination of these two. Or wait a little longer to 2035 or 2040…? That is (at a minimum) what Jevons would argue…?

    I don’t understand what the point of people who cite Jovens paradox is…except I always see it used as a reason to support the status quo. Is it that “efficiency” is a mirage? i.e. that all readily available resources will be used, so attempting to use fewer resources for any particular task is fuelish–i mean foolish–since it just means new tasks will (have to) be invented to consume any extra resources?

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  28. 28. bucketofsquid 1:54 pm 02/7/2013

    Since the vast majority of the petroleum produced is not used for fuel, I doubt that increased efficiency of vehicles will make much real difference. Since petroleum is a commodity that is traded on exchanges the main factor in pricing is psychology, not any real factors such as availability.

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  29. 29. Amanda Dawson 5:22 am 02/25/2013

    A house will ensure that you get the maximum benefit for any money you spend on energy and on making your home more energy efficient. Right House’s philosophy is to recommend design and passive system benefits which deliver optimum energy-efficiency and temperature benefits and do not cost anything to run.

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