Economics at your fingertips  

The Rebound Effect and Energy Efficiency Policy

Kenneth Gillingham (), David Rapson and Gernot Wagner

Review of Environmental Economics and Policy, 2016, vol. 10, issue 1, 68-88

Abstract: What do we know about the size of the rebound effect, the well-known phenomenon that improving energy efficiency may save less energy than expected due to a rebound of energy use? Is there any validity to the claims that energy efficiency improvements can actually lead to an increase in energy use (known as backfire)? This article clarifies what the rebound effect is and provides a guide for economists and policymakers interested in its existence and magnitude. We discuss how some studies in the literature consider a rebound effect that results from a costless exogenous increase in energy efficiency, whereas others examine the effects of a specific energy efficiency policy—a distinction that leads to very different welfare and policy implications. We present the most reliable evidence available about the size of the energy efficiency rebound effect and discuss situations where such estimation is extraordinarily difficult. With this in mind, we present a new way of thinking about the macroeconomic rebound effect. We conclude that overall, the existing research provides little support for the so-called backfire hypothesis. However, our understanding of the macroeconomic rebound effect remains limited, particularly as it relates to induced innovation and productivity growth. (JEL: H23, Q38, Q41)

Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (184) Track citations by RSS feed

Downloads: (external link) (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: The Rebound Effect and Energy Efficiency Policy (2015) Downloads
Working Paper: The Rebound Effect and Energy Efficiency Policy Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from

Access Statistics for this article

Review of Environmental Economics and Policy is currently edited by Robert Stavins

More articles in Review of Environmental Economics and Policy from Association of Environmental and Resource Economists Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK. Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ().

Page updated 2023-01-25
Handle: RePEc:oup:renvpo:v:10:y:2016:i:1:p:68-88.