Last week I made reference to the ‘rebound effect’. I like to illustrate this concept with a little story. Back in December 2003, I wrote off my Ford Ka in a smallish prang. I replaced it with a Golf TDi, for two reasons:

a. I want to have the option of using biodiesel (but that’s another story…).

b. It did 55mpg compared with the Ka’s 40mpg.

Brilliant – cut my fuel consumption by 28% and saved £250 each year.

But….

1. Statistics show that I’m likely to lose about a fifth of that saving by driving more because it has become cheaper. This is the ‘direct rebound effect’.

2. £250 is exactly the cost of a return flight from Newcastle to New York. Given my love of travel, this is a real option. If I take it, then I’ve just doubled the annual carbon emissions I had in the Ka. This is the ‘indirect-‘ or ‘respend-‘ rebound effect (or, as energy economists call it, the Khazzoom-Brookes Postulate). If we save money through efficiency, we can easily wipe out the eco-benefits by choosing to buy or do something even more environmentally damaging with the windfall.

So what effect does this have in practice? The Khazzoom-Brookes Postulate is hotly debated in academic circles – certainly the prominent energy guru Amory Lovins once told me rather tersely that there was no empirical evidence for its existence.

In my opinion this is down to changing consumption patterns. Some time ago I immersed myself in consumer data and found that the fastest growing areas of expenditure were on telecommunications and home entertainment which are less carbon intensive (per pound/euro/dollar) than, say, road or air travel. A back of the fag packet calculation suggested that the rebound effect would not result in environmental damage getting worse, but that only about 50% of expected efficiency benefits would be delivered in practice.

The title of Lovins’ own famous book, “Factor 4: doubling wealth, halving resource use”, backs this up – a factor 4 improvement in resource efficiency will only result in a factor 2 reduction in resource use – the rest we enjoy in increased quality of life. I haven’t seen him since to run this by him!

The bottom line is: with resource efficiency you never quite get the environmental benefits you expect, but it’s still worth doing.