Energy, Economic Growth and Environmental Sustainability: Five Propositions

Steven Sorrell

doi:10.3390/su2061784

Abstract

This paper advances five linked and controversial propositions that have both deep historical roots and urgent contemporary relevance. These are: (a) the rebound effects from energy efficiency improvements are significant and limit the potential for decoupling energy consumption from economic growth; (b) the contribution of energy to productivity improvements and economic growth has been greatly underestimated; (c) the pursuit of improved efficiency needs to be complemented by an ethic of sufficiency; (d) sustainability is incompatible with continued economic growth in rich countries; and (e) a zero-growth economy is incompatible with a fractional reserve banking system. These propositions run counter to conventional wisdom and each highlights either a "blind spot" or "taboo subject" that deserves closer scrutiny. While accepting one proposition reinforces the case for accepting the next, the former is neither necessary nor sufficient for the latter.

Highlights

This paper questions the conventional wisdom underlying climate policy and argues that some long-standing and fundamental questions regarding energy, growth and sustainability need to be reopened
Depending upon where the energy efficiency improvement takes place, these so-called indirect rebound effects can take a number of forms, including increases in the output of particular sectors, shifts towards more energy-intensive goods and services and increases in energy consumption as a result of lower energy prices and more rapid economic growth [7]
Rebound effects will make energy efficiency improvements less effective in reducing overall energy consumption than is commonly assumed. This could limit the potential for decoupling carbon emissions from economic growth, since the contribution from improved energy efficiency will be less than expected— by precisely how much remains unclear

Summary

Introduction

This paper questions the conventional wisdom underlying climate policy and argues that some long-standing and fundamental questions regarding energy, growth and sustainability need to be reopened. 1. The rebound effects from energy efficiency improvements are significant and limit the potential for decoupling energy consumption from economic growth. 2. Rebound Effects are Significant and Limit the Potential for Decoupling Energy Consumption from Economic Growth

Results

Conclusion