Green Growth Unravelled

Summary

The concept of ‘green growth’ is yet another promise to align ecology with economy in a win-win-situation. It rests on the idea of an ‘efficiency revolution’: manifold innovations of green and climate-friendly technologies, huge investments to restructure the industrial, building and transport sectors to sustainable modes, and a boost for using resources and energy more productively and efficiently. The suggestion is that national income can continue to grow while attaining sustainability targets at the same time. This study explores a fatal fallacy of the notion of green growth: while vast productivity increases do indeed incentivize a more efficient use of energy (and resources), they raise demand at the same time – which runs counter to the goal of saving energy. Such increased demand as a result of increased productivity is termed a rebound effect. Because rebound ef-fects nullify a considerable proportion of the savings potential of efficiency technologies and measures, con-tinuous economic growth will eventually thwart the much-needed steep reduction of absolute energy con-sumption.

Although the causal link between increased energy productivity and increased demand was identified back in 1865 and has been discussed in the economic sciences since 1980, rebound effects are still ignored in the ma-jority of energy and climate studies and policies. Prominent research institutions such as the Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA) assume in their scenarios and fore-casts that most of the necessary reductions in greenhouse gas emissions can be achieved by means of effi-ciency improvements. This must be doubted, because rebound effects can constrain or in extreme cases even outweigh the savings potential of energy efficiency measures.

This paper explores the range of possible rebound effects, outlines their quantitative extent and describes the difficulties encountered by political efforts to contain them. It reveals that there is an urgent need for rebound effects to be taken into account in scientific scenarios and in policy-making.