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Assessment Challenges

Rebound Effects

Rebound Effects
Credit: Sunder Muthukumaran via Unsplash

Improvements in the technical efficiency of production processes are a means to reduce resource consumption. However, reductions achieved under real life conditions are usually smaller than what would theoretically be expected under ceteris paribus assumptions. Relevant actors (producers and consumers) will adapt their behaviour to account for the increased efficiencies, often causing additional resource use. This is called rebound- or take back effect. Rebound effects offset part or all of the resource savings that would otherwise be achieved by efficiency improvements. In extreme cases, they can even lead to an increase of total resource consumption (Jevons’s paradox). Rebound effects are mainly explained by economic feedbacks. However, social-psychological factors are also relevant, especially for the consumer side. 

Rebound effects can be divided into direct effects, indirect effects and economy-wide effects.  They should be taken into account in all assessments dealing with efficiency improvements in order to obtain realistic estimates of resource savings and to adequately inform policy making.

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