Radical efficiency and the rebound effect

February 2, 2010 at 8:30 pm 1 comment

By John Craig

NEF have published an impressive report – Growth Isn’t Possible – looking at the economics behind avoiding climate catastrophe.  It’s sobering reading to say the least, but I recommend it.  There are two interesting insights in there for radical efficiency:

  • All things being equal, increases in energy efficiency reduce the cost of using electronic equipment, which tends to increase their use.  In this sense, they are subject to a ‘rebound effect’.  As a result, policy-makers aim to keep the keep the cost of certain activities constant, while increasing efficiency.  This suggests that a green future will involve more expensive energy and more efficient electricity production.
  • “Global average efficiency for electricity generation is approaching 35 per cent and has remained largely unchanged for the past 40 years”.  Even in areas that are technological rather than social, we reach the limits of efficiency quicker than we expect.  And if that’s true of energy production, Baumol reminds us that it’s doubly true of social services.

In energy production, these are both real challenges to the idea that we can improve people’s well-being while reducing the cost of energy.  I wonder what these insights mean for public services.  Traditionally, the right has argued that public services are subject to rebound effects – that services that support struggling families, for example, simply build cultures of dependency.  While I don’t buy that, it does show why co-production and behaviour change seem so common to many good examples of radical efficiency – they avoid the rebound effect by challenging anti-social behaviour and build self-reliance.

Equally, while the Innovation Unit tends to challenge the view that there’s ‘nothing new under the sun’, in a sense the example of the modest gains in energy effiency is liberating.  It may be hard to find radically more efficiency ways to spend time with people and keep them company, for example, but in part that’s just because, like generating energy, we have been at it for a long time.  And it’s no less vital for that.


Entry filed under: Radical Efficiency. Tags: , .

Pain is a good teacher – one for the graph-heads Big Picture Learning is the iphone of education…

1 Comment Add your own

  • 1. alecpatton  |  February 3, 2010 at 11:36 am

    I’m not entirely convinced that, at a domestic level, energy efficiency has that much of an impact on behaviour, because A) electricity is pretty cheap all around, and B) there’s no instant feedback on energy costs, unless you’ve got one of those cool (and slightly spooky) electricity-use meters.

    Because of this, there’s a dissociation between how efficient appliances FEEL, and how much energy the actually use. For example, everything Apple makes feels like it MUST be the environmentally responsible choice because it looks so elegant, even though it’s basically a coal-burning industrial colossus in a white plastic case. On the other side fo the spectrum, the same goes for agas – rustic country-kitchen as they may feel, they’re incredibly wasteful, and environmentalists recommend you use your microwave more – which doesn’t FEEL green (something about the radiation, I guess).


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