Rebound Effect

Origins and the Khazzoom–Brookes postulate

In The Coal Question, Jevons (1865) observed that more efficient steam engines increased rather than reduced coal consumption, the starting point for debates on rebound. The modern discussion began when Khazzoom (1980) argued that mandatory efficiency standards for household appliances could lower operating costs and so fail to save as much energy as expected. Brookes (1990) argued that, at the level of the whole economy, efficiency gains could actually raise energy consumption, and Saunders (1992) formalized this in a neoclassical growth model, coining the name Khazzoom–Brookes postulate. The postulate was received as a challenge to optimism that efficiency policies alone could cut energy demand.

Types of rebound

Greening, Greene and Difiglio (2000) and Sorrell (2007) distinguished three kinds of rebound. Direct rebound is greater use of the service that has become more efficient, such as driving a more fuel-efficient car more. Indirect rebound arises when the money saved is spent on other goods and services whose production uses energy. Economy-wide rebound also includes effects by which efficiency gains alter prices, production and growth, raising energy demand across the economy. Analyzing rebound with microeconomic theory, Chan and Gillingham (2015) stressed that even a large rebound can raise welfare, since consumers enjoy more of the service.

Evidence and policy debates

Small and Van Dender (2007) estimated the direct rebound for US vehicle travel at about 4.5% in the short run and 22% in the long run, declining as incomes rise. Sorrell, Dimitropoulos and Sommerville (2009) concluded that direct rebound for household heating and transport in developed countries is generally below 30%. Davis, Fuchs and Gertler (2014) reported that in Mexico's large-scale refrigerator and air conditioner replacement program, increased use of air conditioners made electricity savings far smaller than expected. Gillingham, Rapson and Wagner (2016) concluded that in most cases rebound does not wipe out savings entirely, while Brockway and colleagues (2021) warned that economy-wide rebound may be larger than climate models assume. The debate is considered alongside policy cases with counterintended outcomes, such as the cobra effect and Braess's paradox.

FAQ

What is the rebound effect in simple terms?

When you switch to a fuel-efficient car, fuel costs less, so you drive more often and farther. As a result, less energy is saved than technical calculations suggest.

Is the rebound effect the same as the Jevons paradox?

The Jevons paradox refers to the extreme case in which rebound exceeds 100%, so efficiency gains actually increase total consumption. Most empirical studies find that rebound offsets only part of the savings.

Sources reviewed: 2026-10-26

References

1. Jevons, W. S. (1865). The Coal Question. London: Macmillan.
2. Khazzoom, J. D. (1980). Economic implications of mandated efficiency in standards for household appliances. The Energy Journal, 1(4), 21–40.
3. Brookes, L. (1990). The greenhouse effect: The fallacies in the energy efficiency solution. Energy Policy, 18(2), 199–201.
4. Saunders, H. D. (1992). The Khazzoom–Brookes postulate and neoclassical growth. The Energy Journal, 13(4), 131–148.
5. Greening, L. A., Greene, D. L., & Difiglio, C. (2000). Energy efficiency and consumption—the rebound effect—a survey. Energy Policy, 28(6–7), 389–401.
6. Small, K. A., & Van Dender, K. (2007). Fuel efficiency and motor vehicle travel: The declining rebound effect. The Energy Journal, 28(1), 25–51.
7. Sorrell, S. (2007). The Rebound Effect: An Assessment of the Evidence for Economy-Wide Energy Savings from Improved Energy Efficiency. London: UK Energy Research Centre.
8. Sorrell, S., Dimitropoulos, J., & Sommerville, M. (2009). Empirical estimates of the direct rebound effect: A review. Energy Policy, 37(4), 1356–1371.
9. Gillingham, K., Rapson, D., & Wagner, G. (2016). The rebound effect and energy efficiency policy. Review of Environmental Economics and Policy, 10(1), 68–88.
10. Davis, L. W., Fuchs, A., & Gertler, P. (2014). Cash for coolers: Evaluating a large-scale appliance replacement program in Mexico. American Economic Journal: Economic Policy, 6(4), 207–238.
11. Chan, N. W., & Gillingham, K. (2015). The microeconomic theory of the rebound effect and its welfare implications. Journal of the Association of Environmental and Resource Economists, 2(1), 133–159.
12. Brockway, P. E., Sorrell, S., Semieniuk, G., Heun, M. K., & Court, V. (2021). Energy efficiency and economy-wide rebound effects: A review of the evidence and its implications. Renewable and Sustainable Energy Reviews, 141, 110781.