This paper presents the evidence of an extensive review of the literature on rebound effects for energy efficiency and renewable energy measures. The objective of the paper is to provide the Department for International Development (DFID), the International Climate Fund (ICF) and potentially other agencies with a guide for the inclusion of rebound effects into option appraisals.
The rebound effect, i.e. the increase in the consumption of an energy service resulting from an increased efficiency (and reduced cost) of that service, varies across sectors, countries and agents. Although the rebound effect is to be considered in the context of developing countries, there are only a handful of studies which seek to estimate the rebound effect in such nations, with studies instead heavily biased towards to the developed world. The estimates of the magnitude of this effect in developing countries presented in this report, therefore, are inevitably heavily reliant on these developed country studies. The report does note where different values might be expected to apply in developing countries.
The first part of this report (Section 2) describes the rebound effect conceptually. The second part (Section 3) provides estimates of the magnitude of the rebound effect. The third part provides guidance on how to select an appropriate value for analytical purposes. The fourth part (Section 5) discusses how the rebound effect can be incorporated into options analysis conducted by DFID and ICF.
There are also two appendices. The first (Appendix A) provides an overview of the literature discussing how the magnitude of the rebound effect is estimated and how the quality of the evidence presented by the studies has been assessed. The second (Appendix B) contains a list of literature and other references consulted.
This report has been produced by Economic Consulting Associates for Evidence on Demand with the assistance of the UK Department for International Development (DFID) contracted through the Climate, Environment, Infrastructure and Livelihoods Professional Evidence and Applied Knowledge Services (CEIL PEAKS) programme, jointly managed by HTSPE Limited and IMC Worldwide Limited.
Economic Consulting Associates. Phase 1 final report: The rebound effect for developing countries. Evidence on Demand, UK (2014) 52 pp. [DOI: http://dx.doi.org/10.12774/eod_cr.march2014.eca]