Greening et. al.: Energy Efficiency and Consumption

A. Greening, L, DL Greene, and C Difiglio. 2000. “Energy efficiency and consumption: the rebound effect: a survey.” Energy Policy 28:389-401.


Rebound effects evolve from a neoclassical economic assumption. They deal with an increase in energy efficiency causing the price for a comparable good to drop, and thus to increase demand for that good, offsetting the efficiency improvement. The assumption here is that, if increased efficiency is to equal decreased overall energy consumption, it must be accompanied by an increase in energy costs.

Direct effects are seen at the micro-level when there is an improvement in energy efficiency. This reduces the price of a good, and this changes consumer patterns. Another effect happening at a different level of the economy results from changes in these consumer patterns and changes in demand profiles. Another effect, the transformational effect can, “…change consumer preferences, alter social institutions and rearrange the organization of production” (391).

The rest of the article comprises a review of quantitative studies on rebound effects. It would be well worth exploring.