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Rebound effect (conservation)
Encyclopedia
In conservation
and energy economics
, the rebound effect (or take-back effect) refers to the behavioral or other systemic responses to the introduction of new technologies that increase the efficiency of resource
use. These responses tend to offset the beneficial effects of the new technology or other measures taken. While the literature on the rebound effect generally focuses on the effect of technological improvements on energy consumption, the theory can also be applied to the use of any natural resource
or other input, such as labor. The rebound effect is generally expressed as a ratio of the lost benefit compared to the expected environmental benefit when holding consumption constant. For instance, if a 5% improvement in vehicle fuel efficiency
results in only a 2% drop in fuel use, there is a 60% rebound effect (since = 60%). The 'missing' 3% might have been consumed by driving faster or further than before.
The existence of the rebound effect is uncontroversial. However, debate continues as to the size and importance of the effect in real world situations.
There are three possible outcomes regarding the size of the rebound effect:
in his 1865 book The Coal Question
, where he observed that the invention in Britain of a more efficient steam engine meant that the use of coal became economically viable for many new uses. This ultimately led to increased coal demand and much increased coal consumption, even as the amount of coal required for any particular use fell. According to Jevons, "It is a confusion of ideas to suppose that the economical use of fuel is equivalent to diminished consumption. The very contrary is the truth."
However, most contemporary authors credit Daniel Khazzoom for the re-emergence of the rebound effect in the research literature. Although Khazzoom did not use the term, he raised the idea that there is a less than one-to-one correlation between gains in energy efficiency and reductions in energy use, because of a change in the 'price content' of energy in the provision of the final consumer product. His study was based on energy efficiency gains in home appliances, but the principle applies throughout the economy. A commonly studied example is that of a more fuel-efficient car. Since each kilometre of travel becomes cheaper, there will be an increase in driving speed and/or kilometres driven, as long as the price elasticity of demand
for car travel is not zero. Other examples might include the growth in garden lighting
after the introduction of energy-saving compact fluorescent lamp
s or the increasing size of houses driven partly by higher fuel efficiency in home heating technologies. If the rebound effect is larger than 100%, all gains from the increased fuel efficiency would be wiped out by increases in demand (the Jevons paradox
).
Khazzoom's thesis was criticized heavily by Michael Grubb and Amory Lovins
who dismissed any disconnection between energy efficiency improvements in an individual market, and an economy-wide reduction in energy consumption. Developing Khazzoom's idea further, and prompting heated debate in the Energy Policy journal at that time, Len Brookes wrote of the fallacies in the energy-efficiency solution to greenhouse gas emissions. His analysis showed that any economically justified improvements in energy efficiency would in fact stimulate economic growth and increase total energy use. For improvements in energy efficiency to contribute to a reduction in economy-wide energy consumption, the improvement must come at a greater economic cost. Commenting in regard to energy efficiency advocates, he concludes that, "the present high profile of the topic seems to owe more to the current tide of green fervor than to sober consideration of the facts, and the validity and cost of solutions."
" to describe the idea that energy efficiency gains paradoxically result in increases in energy use (the modern day equivalent of the Jevons paradox
). He modeled energy efficiency gains using a variety of neo-classical growth models, and showed that the postulate is true over a wide range of assumptions. In the conclusion of his paper, Saunders stated that:
This work provided a theoretical grounding for empirical studies and played an important role in framing the problem of the rebound effect. It also reinforced an emerging ideological divide between energy economists on the extent of the yet to be named effect. The two tightly held positions are:
Even though many studies have been undertaken in this area, neither position has yet claimed a consensus view in the academic literature. Recent studies have demonstrated that direct rebound effects are significant (about 30% for energy), but that there is not enough information about indirect effects to know whether or how often back-fire occurs. Economists tend to the first position, but most governments, businesses, and environmental groups adhere to the second. Governments and environmental groups often advocate further research into fuel efficiency and radical increases in the efficient use of energy as the primary means for reducing energy use and reducing greenhouse gas
emissions (to alleviate the impacts of climate change
). However, if the first position more accurately reflects economic reality, current efforts to invent fuel-efficient technologies may not much reduce energy use, and may in fact paradoxically increase oil
and coal
consumption, and greenhouse gas
emissions, over the long run.
In the example of improved vehicle fuel efficiency, the direct effect would be the increased fuel use from more driving as driving becomes cheaper. The indirect effect would incorporate the increased consumption of other goods enabled by household cost savings from increased fuel efficiency. Since consumption of other goods increase, the embodied fuel used in the production of those goods would increase as well. Finally, the economy wide effect would include the long term effect of the increase in vehicle fuel efficiency on production and consumption possibilities throughout the economy, including any effects on economic growth rates.
For cost reducing resource efficiency, distinguishing between direct and indirect effects is shown in Figure 1 below. The horizontal axis shows units of consumption of the targets good (which could be for example clothes washing, and measured in terms of kilograms of clean clothes) with consumption of all other goods and services on the vertical axis. An economical technology change that enables each unit of washing to be produced with less electricity results in a reduction of the price per unit of washing. This shifts the household budget line rightwards. The result is a substitution effect because of the decreased relative price, but also an income effect due to the increased real income. The substitution effect increases consumption of washing from Q1 to QS, and the income effect from QS to Q2. The total increase in consumption of washing from Q1 to Q2 and the resulting increase in electricity consumption is the direct effect. The indirect effect comprises the increase in other consumption, from O1 to O2. The scale of each of these effects depends on the elasticity of demand for each of the goods, and the embodied resource or externality associated with each good. A parallel effect will happen for cost saving efficient technologies for producers, where output and substitution effects will occur.
The rebound effect can increase the difficulty of projecting the reduction in greenhouse emissions from an improvement in energy efficiency. Estimation of the scale of direct effects on residential electricity, heating and motor fuel consumption has been common motivation for research of rebound effects. Evaluation and econometric methods are the two approaches generally employed in estimating the size of this effect. Evaluation methods rely on quasi-experimental studies and measure the before and after changes to energy consumption from the implementation of energy efficient technology, while econometric methods utilize elasticity estimates
to forecast the likely effects from changes in the effective price of energy services.
Research has found that in developed countries, the direct rebound effect is usually small to moderate, ranging from roughly 5% to 40%. However, the rebound effect may be more significant in the context of the undeveloped markets in developing economies.
. For example, for the case of energy use, more efficient technology is equivalent to a lower price for energy resources. It is well known that changes in energy costs have a large impact on economic growth rates. In the 1970s sharp increases in petroleum prices led to stagflation
(recession
and inflation
) in the developed countries, whereas in the 1990s lower petroleum prices contributed to higher economic growth. An improvement in energy efficiency has the same effect as lower fuel prices, and leads to faster economic growth. Economists generally believe that especially for the case of energy use, more efficient technologies will lead to increased use, because of this growth effect.
To model the scale of this effect, economists use computational general equilibrium (CGE) models. While CGE methodology is by no means perfect, results indicate that economy wide rebound effects are likely to be very high, with estimates above 100% rather common. One simple CGE model has been made available online for use by economists.
For conservation measures, indirect effects closely approximate the total economy wide effect. Conservation measures constitute a change in consumption patterns away from particular targeted goods towards other goods. Figure 2 below shows that a change in preference of a household results in a new consumption pattern that has less of the target good (QT to QT`), and more of all other goods (QO to QO`). The resource consumption or externalities embodied in this other consumption is the indirect effect.
Although a persuasive view has prevailed that indirect effects with respect to energy and greenhouse emissions should be very small due to energy directly comprising only a small component of household expenditure, this view is gradually being eroded. Many recent studies based on life-cycle analysis show the energy consumed indirectly by households is often higher than consumed directly through electricity, gas, and motor fuel, and is a growing proportion. This is evident in the results of recent studies that indicate indirect effects from household conservation can range from 10% to 200% depending on the scenario, with higher indirect rebounds from diet changes aiming to reduce food miles
.
The size of the rebound effect is likely to be different in developing countries. A study was undertaken in rural India to evaluate the impact of an alternative energy scheme. Households were given solar powered lighting in an attempt to reduce the use of kerosene for lighting to zero except for seasons with insufficient sunshine. The scheme was also designed to encourage a future willingness to pay for efficient lighting. The results were surprising, with high direct rebounds between 50 and 80%, and total direct and indirect rebound above 100%. Because the new lighting source was essentially zero cost, operating hours for lighting went up from an average of 2 to 6 per day, with new lighting consisting of a combination of both the no-cost solar lamps and also kerosene lamps. Also, more cooking was undertaken which enabled an increased trade of food with neighboring villages.
Mathis Wackernagel
and William Rees have suggested that any cost savings from efficiency gains be "taxed away or otherwise removed from further economic circulation. Preferably they should be captured for reinvestment in natural capital rehabilitation." This can be achieved through, for example, the imposition of a green tax
, a cap and trade
program, or higher fuel tax
es.
Energy conservation
Energy conservation refers to efforts made to reduce energy consumption. Energy conservation can be achieved through increased efficient energy use, in conjunction with decreased energy consumption and/or reduced consumption from conventional energy sources...
and energy economics
Energy economics
Energy economics is a broad scientific subject area which includes topics related to supply and use of energy in societies. Due to diversity of issues and methods applied and shared with a number of academic disciplines, energy economics does not present itself as a self contained academic...
, the rebound effect (or take-back effect) refers to the behavioral or other systemic responses to the introduction of new technologies that increase the efficiency of resource
Natural resource
Natural resources occur naturally within environments that exist relatively undisturbed by mankind, in a natural form. A natural resource is often characterized by amounts of biodiversity and geodiversity existent in various ecosystems....
use. These responses tend to offset the beneficial effects of the new technology or other measures taken. While the literature on the rebound effect generally focuses on the effect of technological improvements on energy consumption, the theory can also be applied to the use of any natural resource
Natural resource
Natural resources occur naturally within environments that exist relatively undisturbed by mankind, in a natural form. A natural resource is often characterized by amounts of biodiversity and geodiversity existent in various ecosystems....
or other input, such as labor. The rebound effect is generally expressed as a ratio of the lost benefit compared to the expected environmental benefit when holding consumption constant. For instance, if a 5% improvement in vehicle fuel efficiency
Fuel efficiency
Fuel efficiency is a form of thermal efficiency, meaning the efficiency of a process that converts chemical potential energy contained in a carrier fuel into kinetic energy or work. Overall fuel efficiency may vary per device, which in turn may vary per application, and this spectrum of variance is...
results in only a 2% drop in fuel use, there is a 60% rebound effect (since = 60%). The 'missing' 3% might have been consumed by driving faster or further than before.
The existence of the rebound effect is uncontroversial. However, debate continues as to the size and importance of the effect in real world situations.
There are three possible outcomes regarding the size of the rebound effect:
- The actual resource savings are higher than expected – the rebound effect is negative. This will normally occur if the government mandates the use of more resource efficient technologies that are also more costly to use, but not if the increase in efficiency reduces costs
- The actual savings are less than expected savings – the rebound effect is between 0% and 100%. This is sometimes known as 'take-back', and is the most common result of empirical studies on individual markets.
- The actual resource savings are negative – the rebound effect is higher than 100%. This situation is commonly known as the Jevons paradoxJevons paradoxIn economics, the Jevons paradox is the proposition that technological progress that increases the efficiency with which a resource is used, tends to increase the rate of consumption of that resource...
, and is sometimes referred to as 'back-fire'.
History
The rebound effect was first described by William Stanley JevonsWilliam Stanley Jevons
William Stanley Jevons was a British economist and logician.Irving Fisher described his book The Theory of Political Economy as beginning the mathematical method in economics. It made the case that economics as a science concerned with quantities is necessarily mathematical...
in his 1865 book The Coal Question
The Coal Question
The Coal Question; An Inquiry Concerning the Progress of the Nation, and the Probable Exhaustion of Our Coal Mines was a book by economist William Stanley Jevons that explored the implications of Britain's reliance on coal. Given that coal was a finite, non-renewable energy resource, Jevons raised...
, where he observed that the invention in Britain of a more efficient steam engine meant that the use of coal became economically viable for many new uses. This ultimately led to increased coal demand and much increased coal consumption, even as the amount of coal required for any particular use fell. According to Jevons, "It is a confusion of ideas to suppose that the economical use of fuel is equivalent to diminished consumption. The very contrary is the truth."
However, most contemporary authors credit Daniel Khazzoom for the re-emergence of the rebound effect in the research literature. Although Khazzoom did not use the term, he raised the idea that there is a less than one-to-one correlation between gains in energy efficiency and reductions in energy use, because of a change in the 'price content' of energy in the provision of the final consumer product. His study was based on energy efficiency gains in home appliances, but the principle applies throughout the economy. A commonly studied example is that of a more fuel-efficient car. Since each kilometre of travel becomes cheaper, there will be an increase in driving speed and/or kilometres driven, as long as the price elasticity of demand
Price elasticity of demand
Price elasticity of demand is a measure used in economics to show the responsiveness, or elasticity, of the quantity demanded of a good or service to a change in its price. More precisely, it gives the percentage change in quantity demanded in response to a one percent change in price...
for car travel is not zero. Other examples might include the growth in garden lighting
Garden lighting
Landscape lighting or garden lighting refers to the use of outdoor illumination of private gardens and public landscapes; for the enhancement and purposes of safety, nighttime aesthetics, accessibility, security, recreation and sports, and social and event uses.-History:The public landscape and...
after the introduction of energy-saving compact fluorescent lamp
Compact fluorescent lamp
A compact fluorescent lamp , also called compact fluorescent light, energy-saving light, and compact fluorescent tube, is a fluorescent lamp designed to replace an incandescent lamp; some types fit into light fixtures formerly used for incandescent lamps...
s or the increasing size of houses driven partly by higher fuel efficiency in home heating technologies. If the rebound effect is larger than 100%, all gains from the increased fuel efficiency would be wiped out by increases in demand (the Jevons paradox
Jevons paradox
In economics, the Jevons paradox is the proposition that technological progress that increases the efficiency with which a resource is used, tends to increase the rate of consumption of that resource...
).
Khazzoom's thesis was criticized heavily by Michael Grubb and Amory Lovins
Amory Lovins
Amory Bloch Lovins is an American environmental scientist and writer, Chairman and Chief Scientist of the Rocky Mountain Institute. He has worked in the field of energy policy and related areas for four decades...
who dismissed any disconnection between energy efficiency improvements in an individual market, and an economy-wide reduction in energy consumption. Developing Khazzoom's idea further, and prompting heated debate in the Energy Policy journal at that time, Len Brookes wrote of the fallacies in the energy-efficiency solution to greenhouse gas emissions. His analysis showed that any economically justified improvements in energy efficiency would in fact stimulate economic growth and increase total energy use. For improvements in energy efficiency to contribute to a reduction in economy-wide energy consumption, the improvement must come at a greater economic cost. Commenting in regard to energy efficiency advocates, he concludes that, "the present high profile of the topic seems to owe more to the current tide of green fervor than to sober consideration of the facts, and the validity and cost of solutions."
Khazzoom-Brookes postulate
In 1992, economist Harry Saunders coined the term "Khazzoom-Brookes postulateKhazzoom-Brookes postulate
In the 1980s, the economists Daniel Khazzoom and Leonard Brookes independently put forward ideas about energy consumption and behavior that argue that increased energy efficiency paradoxically tends to lead to increased energy consumption...
" to describe the idea that energy efficiency gains paradoxically result in increases in energy use (the modern day equivalent of the Jevons paradox
Jevons paradox
In economics, the Jevons paradox is the proposition that technological progress that increases the efficiency with which a resource is used, tends to increase the rate of consumption of that resource...
). He modeled energy efficiency gains using a variety of neo-classical growth models, and showed that the postulate is true over a wide range of assumptions. In the conclusion of his paper, Saunders stated that:
This work provided a theoretical grounding for empirical studies and played an important role in framing the problem of the rebound effect. It also reinforced an emerging ideological divide between energy economists on the extent of the yet to be named effect. The two tightly held positions are:
- Technological improvements in energy efficiency enable economic growth that was otherwise impossible without the improvement; as such, energy efficiency improvements will usually back-fire in the long term.
- Technological improvements in energy efficiency may result in a small take-back. However, even in the long term, energy efficiency improvements usually result in large overall energy savings.
Even though many studies have been undertaken in this area, neither position has yet claimed a consensus view in the academic literature. Recent studies have demonstrated that direct rebound effects are significant (about 30% for energy), but that there is not enough information about indirect effects to know whether or how often back-fire occurs. Economists tend to the first position, but most governments, businesses, and environmental groups adhere to the second. Governments and environmental groups often advocate further research into fuel efficiency and radical increases in the efficient use of energy as the primary means for reducing energy use and reducing greenhouse gas
Greenhouse gas
A greenhouse gas is a gas in an atmosphere that absorbs and emits radiation within the thermal infrared range. This process is the fundamental cause of the greenhouse effect. The primary greenhouse gases in the Earth's atmosphere are water vapor, carbon dioxide, methane, nitrous oxide, and ozone...
emissions (to alleviate the impacts of climate change
Climate change
Climate change is a significant and lasting change in the statistical distribution of weather patterns over periods ranging from decades to millions of years. It may be a change in average weather conditions or the distribution of events around that average...
). However, if the first position more accurately reflects economic reality, current efforts to invent fuel-efficient technologies may not much reduce energy use, and may in fact paradoxically increase oil
Oil
An oil is any substance that is liquid at ambient temperatures and does not mix with water but may mix with other oils and organic solvents. This general definition includes vegetable oils, volatile essential oils, petrochemical oils, and synthetic oils....
and coal
Coal
Coal is a combustible black or brownish-black sedimentary rock usually occurring in rock strata in layers or veins called coal beds or coal seams. The harder forms, such as anthracite coal, can be regarded as metamorphic rock because of later exposure to elevated temperature and pressure...
consumption, and greenhouse gas
Greenhouse gas
A greenhouse gas is a gas in an atmosphere that absorbs and emits radiation within the thermal infrared range. This process is the fundamental cause of the greenhouse effect. The primary greenhouse gases in the Earth's atmosphere are water vapor, carbon dioxide, methane, nitrous oxide, and ozone...
emissions, over the long run.
Types of effects
The full rebound effect can be distinguished into three different economic reactions:- Direct rebound effect: Increased fuel efficiency lowers the cost of consumption, and hence increases the consumption of that good because of the substitution effect.
- Indirect rebound effect: Through the income effectIncome effectIn economics, the consumer's preferences, money income and prices play an important role in solving the consumer's optimization problem...
, decreased cost of the good enables increased household consumption of other goods and services, increasing the consumption of the resource embodied in those goods and services. - Economy wide effects: New technology creates new production possibilities and increases economic growth.
In the example of improved vehicle fuel efficiency, the direct effect would be the increased fuel use from more driving as driving becomes cheaper. The indirect effect would incorporate the increased consumption of other goods enabled by household cost savings from increased fuel efficiency. Since consumption of other goods increase, the embodied fuel used in the production of those goods would increase as well. Finally, the economy wide effect would include the long term effect of the increase in vehicle fuel efficiency on production and consumption possibilities throughout the economy, including any effects on economic growth rates.
Direct and indirect effects
The rebound effect can increase the difficulty of projecting the reduction in greenhouse emissions from an improvement in energy efficiency. Estimation of the scale of direct effects on residential electricity, heating and motor fuel consumption has been common motivation for research of rebound effects. Evaluation and econometric methods are the two approaches generally employed in estimating the size of this effect. Evaluation methods rely on quasi-experimental studies and measure the before and after changes to energy consumption from the implementation of energy efficient technology, while econometric methods utilize elasticity estimates
Elasticity (economics)
In economics, elasticity is the measurement of how changing one economic variable affects others. For example:* "If I lower the price of my product, how much more will I sell?"* "If I raise the price, how much less will I sell?"...
to forecast the likely effects from changes in the effective price of energy services.
Research has found that in developed countries, the direct rebound effect is usually small to moderate, ranging from roughly 5% to 40%. However, the rebound effect may be more significant in the context of the undeveloped markets in developing economies.
Economy wide effects
Even if the direct and indirect rebound effects add up to less than 100%, technological improvements that increase efficiency may still result in economy wide effects that results in increased resource use for the economy as a whole. In particular, this would happen if resource efficiency enables an expansion of production in the economy, and an increase in the rate of economic growthEconomic growth
In economics, economic growth is defined as the increasing capacity of the economy to satisfy the wants of goods and services of the members of society. Economic growth is enabled by increases in productivity, which lowers the inputs for a given amount of output. Lowered costs increase demand...
. For example, for the case of energy use, more efficient technology is equivalent to a lower price for energy resources. It is well known that changes in energy costs have a large impact on economic growth rates. In the 1970s sharp increases in petroleum prices led to stagflation
Stagflation
In economics, stagflation is a situation in which the inflation rate is high and the economic growth rate slows down and unemployment remains steadily high...
(recession
Recession
In economics, a recession is a business cycle contraction, a general slowdown in economic activity. During recessions, many macroeconomic indicators vary in a similar way...
and inflation
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
) in the developed countries, whereas in the 1990s lower petroleum prices contributed to higher economic growth. An improvement in energy efficiency has the same effect as lower fuel prices, and leads to faster economic growth. Economists generally believe that especially for the case of energy use, more efficient technologies will lead to increased use, because of this growth effect.
To model the scale of this effect, economists use computational general equilibrium (CGE) models. While CGE methodology is by no means perfect, results indicate that economy wide rebound effects are likely to be very high, with estimates above 100% rather common. One simple CGE model has been made available online for use by economists.
Indirect effects from conservation
Although a persuasive view has prevailed that indirect effects with respect to energy and greenhouse emissions should be very small due to energy directly comprising only a small component of household expenditure, this view is gradually being eroded. Many recent studies based on life-cycle analysis show the energy consumed indirectly by households is often higher than consumed directly through electricity, gas, and motor fuel, and is a growing proportion. This is evident in the results of recent studies that indicate indirect effects from household conservation can range from 10% to 200% depending on the scenario, with higher indirect rebounds from diet changes aiming to reduce food miles
Food miles
Food miles is a term which refers to the distance food is transported from the time of its production until it reaches the consumer. Food miles are one factor used when assessing the environmental impact of food, including the impact on global warming....
.
Income level variation
Research has shown that the direct rebound effects for energy services is lower at high income levels, due to less price sensitivity. Studies have found that own-price elasticity of gas consumption by UK households was two times greater for households in the lowest income decile when compared to the highest decile. Studies have also observed higher rebounds in low-income houses for improvements in heating technology. Evaluation methods have also been used to assess the scale of rebound effects from efficient heating installations in lower income homes in the United Kingdom. This research found that direct effects are close to 100% in many cases. High income households in developed countries are likely to set the temperature at the optimum comfort level, regardless of the cost – therefore any cost reduction does not result in increased heating, for it was already optimal. But low-income households are more price sensitive, and have made thermal sacrifices due to the cost of heating. In this case, a high direct rebound is likely. This analogy can be extended to most household energy consumption.The size of the rebound effect is likely to be different in developing countries. A study was undertaken in rural India to evaluate the impact of an alternative energy scheme. Households were given solar powered lighting in an attempt to reduce the use of kerosene for lighting to zero except for seasons with insufficient sunshine. The scheme was also designed to encourage a future willingness to pay for efficient lighting. The results were surprising, with high direct rebounds between 50 and 80%, and total direct and indirect rebound above 100%. Because the new lighting source was essentially zero cost, operating hours for lighting went up from an average of 2 to 6 per day, with new lighting consisting of a combination of both the no-cost solar lamps and also kerosene lamps. Also, more cooking was undertaken which enabled an increased trade of food with neighboring villages.
Rebounds with respect to time
The individual opportunity cost of time is not often considered. Hence, often overlooked in the rebound effect literature is the rebound effect with respect to savings in time. Faster modes of transport are a classic example. Since the time cost forms a major part of the total cost of commuter transport, faster modes will reduce real costs, but will also encourage longer commuting distances. While important, it is almost impossible to estimate empirically the scale of such effects due to the subjective nature of the value of time. Time saved can either be directed towards work or leisure. Labour time saved at work due to the increased labour productivity is likely to be spent on further labour time at higher productive rates. For leisure time saving, this may simply encourage people to diversify their leisure interests to fill their generally fixed period of leisure time.Suggested Solution
In order to ensure that efficiency enhancing technological improvements actually reduce fuel use, the ecological economistsEcological economics
Image:Sustainable development.svg|right|The three pillars of sustainability. Clickable.|275px|thumbpoly 138 194 148 219 164 240 182 257 219 277 263 291 261 311 264 331 272 351 283 366 300 383 316 394 287 408 261 417 224 424 182 426 154 423 119 415 87 403 58 385 40 368 24 347 17 328 13 309 16 286 26...
Mathis Wackernagel
Mathis Wackernagel
Mathis Wackernagel is a Swiss-born sustainability advocate. He is currently President of Global Footprint Network, an international sustainability think tank with a presence in Oakland, California; Brussels, Belgium, and Zurich, Switzerland...
and William Rees have suggested that any cost savings from efficiency gains be "taxed away or otherwise removed from further economic circulation. Preferably they should be captured for reinvestment in natural capital rehabilitation." This can be achieved through, for example, the imposition of a green tax
Ecotax
Ecotax refers to taxes intended to promote ecologically sustainable activities via economic incentives. Such a policy can complement or avert the need for regulatory approaches. Often, an ecotax policy proposal may attempt to maintain overall tax revenue by proportionately reducing other taxes...
, a cap and trade
Emissions trading
Emissions trading is a market-based approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants....
program, or higher fuel tax
Fuel tax
A fuel tax is an excise tax imposed on the sale of fuel. In most countries the fuel tax is imposed on fuels which are intended for transportation...
es.
See also
- Efficient energy useEfficient energy useEfficient energy use, sometimes simply called energy efficiency, is the goal of efforts to reduce the amount of energy required to provide products and services. For example, insulating a home allows a building to use less heating and cooling energy to achieve and maintain a comfortable temperature...
- Encyclopedia of the Earth