Energy sufficiency and rebound effects

The concept of energy sufficiency is gaining increasing attention as a potentially promising approach to mitigating climate change. However, there is no single agreed definition of energy sufficiency.

Some authors consider energy sufficiency to be a particular level of energy service consumption that is consistent with human well-being and environmental limits. Others consider it to be a reduction in energy service consumption that has the effect of reducing the energy and environmental impacts of that consumption - an interpretation that is similar to the older concept of energy conservation.  Example energy sufficiency actions include turning lights off in unoccupied rooms, lowering thermostats, avoiding air travel and cycling rather than driving to work. While both definitions have their merits, the former is more contentious and is harder to operationalise. As a result, this report primarily uses the latter definition.

The potential for energy sufficiency to reduce energy use and emissions is gaining increasing attention. One reason is that improvements in energy efficiency have not reduced energy consumption by as much as anticipated. This is partly due to various rebound effects – namely behavioural responses to improved energy efficiency that offset some of the potential energy and emission savings. For example, people may take the benefits of improved insulation in the form of warmer homes rather than reduced energy consumption (a direct rebound effect), or they may spend the cost savings on other goods and services that also require energy and emissions to provide (an indirect rebound effect).

The evidence on the size of such rebound effects has grown substantially over the last decade and their importance for energy and climate policy has become increasingly recognised.

This report explores the relationship between rebound effects and energy sufficiency.

Specifically, the report:

• identifies the source and magnitude of rebound effects from improved energy efficiency;
• suggests ways in which energy sufficiency actions could reduce these rebound effects and thereby increase energy and carbon savings;
• investigates how energy sufficiency actions can lead to rebound effects of their own.

This leads to some conclusions on the effectiveness of energy sufficiency actions and the implications for public policy. The report combines insights from economics and social psychology and argues that both of these perspectives are required to fully understand the relevant issues.