So What If There Were a Larger and More Sustained Energy Efficiency Effort across the Economy, What Would be the Impact? Research Briefing 03

The real challenge of positive economic impacts is to those policy makers who are working hard to develop sustainable energy savings. As disposable household income is spent, additional energy is consumed as the economy seeks to meet increased demand for goods and services. Over time this can erode the initial absolute energy savings of the original initiative. Thus, a key challenge in the near term is to better understand this type of economic rebound effect and its impact on net energy savings. Improving our understanding of how people use this income released by lower energy bills will allow energy policy makers to better forecast net energy efficiency outcomes and to better accommodate economic growth, while retaining energy savings and carbon reductions.