Is what we think of as “rebound” really just income effects in disguise?

This paper examines the question of whether unexpectedly high energy use in the wake of energy efficiency gains can be explained as arising from increases in consumer wealth, as opposed to energy efficiency rebound effects. The analysis concludes that historical energy consumption increases were driven by more than just income levels, with the lowest-income consumers in the US using more energy in 2002 than they did in 1987 despite significant energy use efficiency gains and despite declining average incomes in this category. Further, direct use of energy in households increased for all income categories over this time period. These results point to rebound as being the culprit, not income effects.

Graphical AbstractFigure optionsDownload as PowerPoint slideHighlights
► The analysis examines historical US household energy use by household income level.
► Low income earners increased their direct use of energy and energy use overall.
► Direct use of energy in the household increased for all levels of income.
► Increased incomes cannot explain unexpectedly high energy use; rebound effects can.
► Most US energy use is embedded energy—the energy “contained” in goods and services.