A new study, described in this article at Ars Technica , is good news for fans of energy efficiency (as we are at Scaling Green). The gist of it is that the energy efficiency "rebound effect" - in which greater energy efficiency actually leads people to squander some or all of the savings - is greatly exaggerated, and that energy efficiency still offers powerful bang for the buck. Here's an excerpt from the Ars Technica article:
Give everyone fuel-efficient cars and we’ll use less fuel, right? According to some economists—and opponents of mandated improvements in energy efficiency—we'll squander some of the savings by driving more. That argument goes for other forms of energy efficiency, suggesting they all can actually lead to greater energy use through a rebound effect. However, a group of economists and others, led by Kenneth Gillingham of Yale University, argue in a new Nature commentary that the rebound effect is exaggerated.
According to their article, the effect is real but small: 5 to 30 percent of energy savings may be lost due to greater use. At most, this could reach a little over half of intended savings lost on large scales—but energy is still saved overall. These numbers are supported by many (“vast” is the word used by the authors) academic studies and simulations.
To sum everything up: the rebound effect exists, and it should be taken into account when planning policy and legislation. Taking all the various aspects together, studies estimate the combined effects to be between 20 and 60 percent on a macroeconomic scale. This certainly isn’t negligible, but it shows that improved efficiency will still lead to reduced energy use overall.
By the way, it's worth noting that one of the main groups pushing the "rebound effect" as an attack on energy efficiency is the Institute for Energy Research (IER). According to Sourcewatch, this group has received hundreds of thousands of dollars from fossil fuel interests, such as the Koch brothers and ExxonMobil, over the years. In addition, Sourcewatch notes, IER "advocates positions on environmental issues including deregulation of utilities, climate change denial, and claims that conventional energy sources are virtually limitless." Finally, as Desmogblog points out, the IER's president (Thomas Pyle) "previously worked as a lobbyist for Koch Industries, while IER’s CEO Robert L. Bradley was formerly Director of Public Relations Policy at Enron, where he served as speechwriter for Enron CEO Kenneth Lay." That pretty much says it all.