The Rebound Effect in Green Marketing & Conservation

Rebound Effect in Energy Conservation

An increase in consumption of water, or energy, or any commodity associated with increases in efficiency is supported by economic theory and studies in specific sectors. 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.

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 closely related to the price elasticity of the good or service that the resource is used to provide.

I read a practical application of this economic theory in a recent blog about water conservation. If a number of individuals (or companies) conscientiously conserve water at home and at work, their savings can be seen as extra capacity by the city -- and developers are then allowed to increase their construction projects to use this extra capacity.

This "Rebounding" Strategy Penalizes Conservation

Enter the SYSTEM of community economics and how conservation is rewarded, penalized and measured for the insatiable growth of the government tax base and commercial interests.

Another version of this ineffective policy structure includes setting rationing quotas on past levels of usage vs. a basic allocation structure. Past conservationists can be penalized for CONSERVING and non-conservationists rewarded for NOT CONSERVING when everyone is given an equal % cut to their ration based on past usage.

The Rebound Effect in Development vs. Water Conservation

Journalist Andrew Potter has argued that improvements in efficiency "end up making things bigger or faster while keeping energy consumption constant", and that increased taxation is the only way to reduce resource use. He has proposed the principle of waste homeostasis, in analogy to Gerald Wilde's theory of risk homeostasis, suggesting that the total amount of waste is insensitive to improvements in efficiency.