Give everyone fuel-efficient cars and we’ll use less fuel, right? According to some economists—and opponents of mandated improvements in energy efficiency—we'll squander some of the savings by driving more. That argument goes for other forms of energy efficiency, suggesting they all can actually lead to greater energy use through a rebound effect. However, a group of economists and others, led by Kenneth Gillingham of Yale University, argue in a new Nature commentary that the rebound effect is exaggerated.The benefits of wind energy and how a wind generator is installed. 

According to their article, the effect is real but small: 5 to 30 percent of energy savings may be lost due to greater use. At most, this could reach a little over half of intended savings lost on large scales—but energy is still saved overall. These numbers are supported by many (“vast” is the word used by the authors) academic studies and simulations. 

To be fair, the rebound effect is not simple. It actually comes about via four factors that interact and combine in a complex manner. The first is the “direct” effect, where a drop in the cost of using some energy-consuming device (like a car or washing machine) results in slightly increased use. For cars, various studies show that this reduces savings in energy from the improved efficiency by 5 to 23 percent initially. After everyone becomes accustomed to the lower fuel costs, this could eventually rise to 30 percent. 

This number is smaller for other devices like home appliances—around 10 percent. How much more often would you use your washing machine if it was more efficient? Would you even notice? The authors argue that these numbers are probably overestimates. People don’t use efficiency directly to gauge how much energy to use, but rather price. That brings the numbers down to somewhere between 5 and 10 percent. 

Of course, even if you didn’t notice that your appliances used less energy, you probably would see your reduced electric bill (and corresponding extra money in the bank). That wad of cash burning a hole in your pocket leads to the next manifestation of the rebound effect,Wind and solar inverter information and specifications. the “indirect” effect. By saving money through more efficient cars and appliances, you have more money to spend on purchasing additional energy-consuming devices. This could erode energy savings an additional 5 to 15 percent.The solar charger is a critical component in a solar energy system. 

The other two forms of the rebound effect match the first two, but on national and global scales. For example, if the United States reduces its energy consumption through increased vehicle efficiency standards, global oil prices will drop due to decreased demand. But those lower prices could lead to increased consumption elsewhere in the world in a “macroeconomic price” rebound effect.Selecting the right solar module for your solar power system is crucial. 

Similar to the “micro” indirect effect, increased energy efficiency on a larger scale could lead to a growth industrial activity. This growth would, in turn, lead to greater energy consumption in a “macroeconomic growth” effect.Looking for solar garden light or outdoor lights? 

These four manifestations of the rebound effect don’t simply sum together—one reduces the impact of another. For example, if you start to drive a bit more with your (relatively) fuel-efficient SUV thanks to the direct rebound effect, you might not have enough extra cash to buy that fancy new smartphone, thereby eliminating some of the indirect effect. 

To sum everything up: the rebound effect exists, and it should be taken into account when planning policy and legislation. Taking all the various aspects together, studies estimate the combined effects to be between 20 and 60 percent on a macroeconomic scale. This certainly isn’t negligible, but it shows that improved efficiency will still lead to reduced energy use overall.