Will energy plan lead to less energy use?

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The energy action plan, set to be adopted on 19 October, foresees more than 75 actions to achieve a 20% reduction of Europe’s energy consumption by 2020. But several energy experts question whether more efficiency automatically leads to less energy consumption.

Although energy efficiency has recently received more political attention, there are still questions over the effectiveness of particular policies. 

Several energy economists have questioned whether energy efficiency measures really do bring energy savings on a macro-economic scale. Building on the work of nineteenth century economist Stanley Jevons, they have looked at the “rebound” or “take-back” effects of energy efficiency policies. This effect takes place when the energy savings produced by the measure are taken back by consumers in the form of higher consumption. An example: a household, which has made big energy savings over the year might, at the end of the year, decide to buy a new car with the money they saved. It is questionable therefore whether, on a macro-economic level, they contributed to less energy consumption.

report  produced in 2005 by the UK House of Lords’s Science and Technology Committee as a response to the EU’s Green Paper drew attention to this issue, which in academic circles is also known as the “Khazzoom-Brookes postulate”. 

Positions

2005 study  by the International Energy Agency looked at the energy efficiency critics and concluded: "Energy efficiency analysts who suggest that the rebound effect erodes some of the energy savings due to technical efficiency improvements do make a valid point, based on the empirical evidence. Some consumers and businesses will increase their demand for energy services as the cost of the service declines. But empirical evidence suggests that the size of the rebound effect is very small to moderate, with the exact magnitude dependent on the location, sector of the economy, and end-use".

Although most experts now accept the existence of this rebound effect, the debate continues over its magnitude. In the UK, the Energy Research Centre (UKERC) is conducting an in-depth study of the magnitude and importance of the rebound effect of energy efficiency policies. 

Commission officials working on the preparation of the action plan confirmed to EURACTIV that they have looked into the possible rebound effects and have calculated them into the 20% target.

 

Background

Energy Commissioner Andris Piebalgs will present his long-awaited action plan on energy efficiency on 19 October, which consists of a catalogue of EU-wide measures to make Europe's economies more energy-efficient. The plan is a follow-up to the 2005 Green Paper, which started a stakeholder consultation on achieving the goal of reducing energy consumption in the EU by 20% by the year 2020. 

Energy efficiency has become one of the Commission's (and member states') answers to the double challenge of global warming and the EU's increasing energy dependency on oil and gas from the Middle East or Russia. In the United States, energy efficiency is much lower on the political agenda because of US citizens' reluctance to reduce their "energy hunger".

Timeline

  • Energy Commissioner Piebalgs will present his energy efficiency action plan on 19 October 2006.
  • EURACTIV welcomes views and position papers from stakeholders and will report later this week about the actual plan and first reactions.

Further Reading

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