Specific actions in households like voluntary reducing energy use or changes in consumption patterns, are supposed to have an impact on reducing carbon emissions and so, fighting climate change. This is perceived as an easy, cheap and effective way for policy makers to achieve climate targets. Therefore, they foster them. Voluntary energy conservation also generates monetary savings for households and, beyond appealing to environmental awareness, this is another (important) argument policy-makers use to persuade households to save energy.
However, these policies do not take into account for something obvious and relevant. These monetary resources trigger indirect and economy-wide rebound effects, i.e. additional climate and environmental impacts. Saved money can be mainly used in two different ways: (1) purchase new goods or services: their production and use generate carbon emissions and other environmental impacts, and (2) save them in a financial institution or anywhere: supposing present or future consumption and/or investments, and therefore also generating impacts. Not to talk about additional economic growth produced by investments, provoking additional climate impacts.
We have conducted a comprehensive study, using a recursive-dynamic economy–energy–environment computable general equilibrium model for the Catalan economy with 6,490 equations and variables. In this study we have tested a set of 78 different actions (or scenarios), comprising a total of 1,560 runs in the model. Results obtained show rebound effects between 61.77% to 117.49%, depending on the action. So, in most cases, energy conservation actions are not as effective as expected in mitigating climate change, and in some (few) of them, carbon emissions even increased. We also show and test how a well-designed carbon tax can offset this type of rebounds. Our main recommendation to policy-makers is that there are no simple solutions. Complex policies that include several measures are better (i.e. foster voluntary energy conservation, plus re-spending measures, plus environmental taxation, etc.).
An article with all the details and results is about to be sent in a peer-reviewed journal for publication.
This figure below includes some results from scenarios where energy savings are re-spent in other non-energy goods and services. If for instance, we use the saved money to spend it in flights, there are almost no reductions in carbon emissions.
Have a good and well-deserved vacation.
Jaume