The Paradox of Energy Efficiency
2nd November 2012
Better insulation and more-efficient heaters did not reduce energy use because people spent the gains on bigger, warmer houses. Another example: When cars get more mileage per gallon, driving becomes cheaper, so people tend to drive more. An indirect rebound occurs when efficiency improvements raise the productivity of other goods, thereby boosting the demand for energy. The demand for tires, for example, goes up as people wear out tires driving their energy-efficient cars more, so the tire industry uses more energy. Embedded energy is the extra power used to produce, distribute, and maintain energy-efficient goods such as high-efficiency insulation. And economy-wide rebounds, which include indirect and embedded rebounds, result from the ways in which people use their savings on energy to purchase other goods and services that also require energy to produce.