Columnists: Hans Nilsson, Fourfact

Published on: 23 Feb 2016

Good bye rebound – Hello Multiple Benefits

Or phrased differently: Good bye narrow-mindedness and Hello comprehensiveness. We are after all living in a world in which we are trying to get the full result – all things considered – not just a description of how each piece is shaped.

Still we are taught, in particular when studying economics, to estimate and shape the world in fragments. Our teachers call it “ceteris paribus” – everything else equal. The analysis, they say, should consider what would happen if only one parameter is changed and all other are held constant. For example, if taxes were raised, how would that impact production, labour and welfare, etc. Everything else should not (=is not allowed to) change. As if only one parameter, such as taxes, affected companies, people and opportunities.

In consequence, we have decade-long debates about “rebound” from changes in energy efficiency. Hours and hecatombs of literature have tried to isolate the question whether energy efficiency improvements would have an impact on the energy systems or if the efforts could be wasted and if the energy use would “snap back” and result in an even higher energy use than before. Generations of energy efficiency advocates have been discouraged and intimidated by this analytical impasse.

Yet, the method to isolate one factor (efficiency improvements) and read one result (energy use) only is a simplification, not to say wrong ! The correct method should have been “mutatis mutandis” meaning "all the necessary changes having been made". If energy efficiency is changed it will have an impact not only on the use of energy but on a host of other things such as productivity, health, public sector resources, etc. All those that have been identified and captured in the IEA publications about “multiple benefits’.

So we should not restrict ourselves to one dimension only, but try to calculate the full set of impacts when we are advocating and changing energy efficiency. That is certainly not easy but it is more accurate!

Hello Multiple Benefits and Good Bye rebound!

Other columns by Hans Nilsson