Rebound effect (green marketing)
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The term Rebound effect is used in innovation theory/green marketing to refer to the increases of demand that are caused by the introduction of more efficient/environmentally sound technologies. This increase in consumption then reduces the size of the effect of the improved technology on total energy use.
That there is an increase in consumption associated with increases in efficiency is well-supported by economic theory and studies in specific sectors looking for the effect, but debates remain over how important the effect is in different circumstances. In developed countries, the rebound effect is small to moderate, ranging from roughly 5 to 40%, depending on the type of energy used. [1] There are suspicions that the rebound effect may be much more significant in the context of developing economies. [2]
A fuel-economy rebound effect of 20%, for instance, would mean that a 10% improvement in vehicle fuel economy would cause a 2% increase in the distance driven, leading to only an 8% reduction in consumption of fuel for a 10% increase in efficiency. This effect is, then, closely related to the price elasticity of the resource being discussed.
Typical examples from the marketing perspective might be the growth in garden lighting after the introduction of energy saving CFLs orrising numbers of two-car households when small cars are sold as green/energy saving.
Andrew Potter has proposed the principle of waste homeostasis, in analogy to Gerald Wilde's theory of risk homeostasis, suggesting that the amount of waste is insensitive to improvements in efficiency. [3] This view has not been addressed in the economics literature.
[edit] See also
[edit] References
- ^ Greening, Lorna (2000), "Energy efficiency and consumption—the rebound effect—a survey.", Energy Policy 28: 389-401
- ^ Roy, Joyashree (2000), "The rebound effect: some empirical evidence from India", Energy Policy 28: 433-438
- ^ Potter, Andrew (2007), "Planet-friendly design? Bah, humbug.", MacLean's 120(5): 14
[edit] External link
- Frank Gottron, Energy Efficiency and the Rebound Effect: Does Increasing Efficiency Decrease Demand? Congressional Research Service report RS20981. (July 2001)
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