Abstract
The majority of global energy scenarios anticipate a structural break in the relationship between energy consumption and gross domestic product (GDP), with several scenarios projecting absolute decoupling, where energy use falls while GDP continues to grow. However, there are few precedents for absolute decoupling, and current global trends are in the opposite direction. This paper explores one possible explanation for the historical close relationship between energy consumption and GDP, namely that the economy-wide rebound effects from improved energy efficiency are larger than is commonly assumed. We review the evidence on the size of economy-wide rebound effects and explore whether and how such effects are taken into account within the models used to produce global energy scenarios. We find the evidence base to be growing in size and quality, but remarkably diverse in terms of the methodologies employed, assumptions used, and rebound mechanisms included. Despite this diversity, the results are broadly consistent and suggest that economy-wide rebound effects may erode more than half of the expected energy savings from improved energy efficiency. We also find that many of the mechanisms driving rebound effects are overlooked by integrated assessment and global energy models. We therefore conclude that global energy scenarios may underestimate the future rate of growth of global energy demand.
Highlights
We argue that: first, the evi dence suggests economy-wide rebound effects may erode more than half of the potential energy savings from improved energy efficiency; second, the models used by the Intergovernmental Panel on Climate Change (IPCC) and others take insufficient account of these rebound effects; and third, the resulting scenarios may underestimate the future rate of growth of global energy demand
Many climate and energy scenarios project a significant departure from the historical close relationship between global energy consump tion and gross domestic product (GDP) and a move towards absolute decoupling
The evidence reviewed in this paper sug gests that economy-wide rebound effects could erode more than half of the anticipated energy savings
Summary
Between 1971 and 2018, global GDP (in US$2010 constant prices) grew by an average of 3.1%/year [8] while global primary and final energy consumption increased by an average of 2.0%/year and 1.8%/year, respectively [9] This is relative decoupling, since energy consumption grew more slowly than GDP, but there is no historical global experience of absolute decoupling, where energy use falls while GDP continues to grow. There is some experience of absolute decoupling at the national level, but only for a limited number of countries (e.g., the UK and Denmark) for relatively short periods of time [10,11] These examples of absolute decoupling have been partly achieved by ‘offshoring’ domestic manufacturing to other countries [12,13].
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