I always knew it was a fallacy that Prius cars were good for the environment:
But Owen notes improved efficiency doesn’t always translate to reduced energy use, thanks to something called the “rebound effect.” It’s pretty simple: as we become more efficient at using energy, we can save money ‚ÄĒ which then allows us to use more of that energy than we did before. Picture it this way: you trade in your gas-guzzling SUV for a new efficient hybrid, end up paying less per mile for gasoline, and use some of the savings to drive more than you did with the SUV. The efficiency has rebounded.
It’s not clear how big the rebound effect really is. Efficiency advocates say that the effect, when it exists, is limited. Amory Lovins, the head of the Rocky Mountain Institute and an efficiency evangelist, has written that “no matter how efficient your house or washing machine becomes, you won’t heat your house to sauna temperatures, or rewash clean clothes.” There’s a limit to how much more I would drive after buying a hybrid even as my gas bill shrinks.
But Owen argues that the rebound effect is much broader than a one-to-one relationship. I might drive a little bit more using the savings from my more efficient car, but I might also take the rest of those savings and spend it on something else ‚ÄĒ perhaps a vacation flight, or a new television. And nearly everything we buy and consume today requires energy, from appliances to holidays. Perhaps that’s the reason American electricity production grew 66% between 1984 and 2005 even as the economy overall became much more efficient. And things are likely to be even worse in a rapidly growing nation like China, where a lot of people are acquiring consumer goods and other luxuries for the first time. “Energy efficiency by itself is not a sufficient green strategy,” says Owen.