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.

150 years ago, Stanley Jevons introduced the concept of energy rebound: that anticipated energy efficiency savings may be “taken back” by behavioural responses. This is an important issue today because, if energy rebound is significant, this would hamper the effectiveness of energy efficiency policies aimed at reducing energy use and associated carbon emissions. However, empirical studies which estimate national energy rebound are rare and, perhaps as a result, rebound is largely ignored in energy-economy models and associated policy. A significant difficulty lies in the components of energy rebound assessed in empirical studies: most examine direct and indirect rebound in the static economy, excluding potentially significant rebound of the longer term structural response of the national economy. In response, we develop a novel exergy-based approach to estimate national energy rebound for the UK and US (1980–2010) and China (1981–2010). Exergy—as “available energy”—allows a consistent, thermodynamic-based metric for national-level energy efficiency. We find large energy rebound in China, suggesting that improvements in China’s energy efficiency may be associated with increased energy consumption (“backfire”). Conversely, we find much lower (partial) energy rebound for the case of the UK and US. These findings support the hypothesis that producer-sided economies (such as China) may exhibit large energy rebound, reducing the effectiveness of energy efficiency, unless other policy measures (e.g., carbon taxes) are implemented. It also raises the prospect we need to deploy renewable energy sources faster than currently planned, if (due to rebound) energy efficiency policies cannot deliver the scale of energy reduction envisaged to meet climate targets.

Background. The contribution of information and communication technologies (ICTs) to a low carbon economy is unclear. Previous reviews emphasise the need to assess the specific factors that determine the environmental impacts of ICTs, but none of them link those factors to the magnitude of the impacts on energy consumption and carbon emissions. Our study aims to fill this evidence gap. Methods/Design. We restrict our analysis to a single application domain, namely e-materialisation, defined as the partial or complete substitution of material products with electronic equivalents. We conduct the first systematic literature review of the direct and higher order impacts of the digitalisation of goods on energy consumption. Results/Synthesis. We identify 31 relevant studies that we sort into five categories, namely: ‘e-publications’ (e-books, e-magazines and e-journals); ‘e-news’; ‘e-business’; ‘e-music’; and ‘e-videos and games’. All but one of the 31 studies use life-cycle analysis and employ a range of product-system configurations, functional units, system boundaries and allocation rules. Confining attention to direct and substitution effects, the studies suggest potential energy savings from e-publications, e-news and e-music, and less potential from e-business and e-videos/games. However, different assumptions for key variables (such as the lifetime and energy efficiency of user devices, the extent to which personal transport is displaced and the number of users of material and digital products) lead to very different estimates—including many where lifecycle energy consumption increases. Most of the studies assume that digital goods substitute for material goods and all of them neglect rebound effects—which suggests that they overestimate energy savings. Discussion. Given the diversity and context-specificity of the available evidence, the optimistic assumptions that are frequently used (e.g. perfect substitution) and the neglect of rebound effects, we cannot conclude that e-materialisation has delivered significant energy savings to date or is likely to do so in the future.

This paper investigates the relationships between energy efficiency improvements by producers, the ease of substitution between energy and other inputs and the size of the resulting “rebound effects”. Fundamentally, easier substitution leads to larger rebounds. Focusing upon conceptual and methodological issues, the paper highlights the challenges of estimating and modeling rebound effects with the help of production and cost functions and questions the robustness of the evidence base in this area. It argues that the multiple definitions of “elasticities of substitution” are a source of confusion, the most commonly estimated elasticity is of little practical value, the empirical literature is contradictory, prone to bias and difficult to use and there are only tenuous links between this literature and the assumptions used within energy-economic models. While “energy-augmenting technical change” provides the natural choice of independent variable for an estimate of rebound effects, most empirical studies do not estimate this form of technical change, many modeling studies do not simulate it and others simulate it in such a way as to underestimate rebound effects. As a result, the paper argues that current econometric and modeling studies do not provide reliable guidance on the magnitude of rebound effects in different industrial sectors.