How misleading is it? Consider the cornerstone claim by the authors:
The growing evidence that low-cost efficiency often leads to faster energy growth was recently considered by both the Intergovernmental Panel on Climate Change and the International Energy Agency. They concluded that energy savings associated with new, more energy efficient technologies were likely to result in significant “rebounds,” or increases, in energy consumption. This means that very significant percentages of energy savings will be lost to increased energy consumption.Let’s set aside for now that first misleading statement. There is no “growing evidence that low-cost efficiency often leads to faster energy growth.” To the extent that there is any evidence that broad efficiency measures actually lead to faster energy growth than would have occurred without those measures, both the IEA and IPCC clearly reject it, as we’ll see.
The I.E.A. and I.P.C.C. estimate that the rebound could be over 50 percent globally.
Based on the New York Times piece, however, you’d think that the IPCC and the IEA were quite devastated by their analysis of the rebound effect and had become sour on energy efficiency as a climate-mitigation tool for policymakers. In fact, the reverse is true. Based on their review of the literature, both the IEA and IPCC strongly endorse energy efficiency measures!
Here is what IEA Executive Director Maria van der Hoeven said on Wednesday in a news release about the IEA’s Energy Efficiency Market Report:
“Energy efficiency is the invisible powerhouse in IEA countries and beyond, working behind the scenes to improve our energy security, lower our energy bills and move us closer to reaching our climate goals.”
That same IEA news release notes that “in the IEA scenario consistent with limiting the long-term increase in global temperatures to no more than 2 degrees Celsius, the biggest share of emissions reductions — 40% — comes from energy efficiency.” The report itself provides data “confirming energy efficiency’s place as the ‘first fuel.’”
As for the IEA report from last month the op-ed is referencing, Capturing the Multiple Benefits of Energy Efficiency, the central conclusion on the rebound effect was, “Considering multiple benefits also has important implications for unravelling one of the persistent challenges in energy efficiency – the rebound effect – revealing that it often signals a positive outcome in terms of achieving broader social and economic goals.”
The IEA concluded that “the uptake of economically viable energy efficiency investments has the potential to boost cumulative economic output through 2035 by USD 18 trillion,” which is larger than the current size of the U.S. economy! The point of the report is that some of the rebound effect is actually a good thing socially and economically — and makes efficiency vastly more cost-effective than anyone thought.
That IEA report found the co-benefits from energy efficiency upgrades equal — and often exceed — the energy savings. When the value of productivity and operational benefits were factored into “traditional internal rate of return calculations, the payback period for [industrial] energy efficiency measures dropped from 4.2 to 1.9 years.” Payback time was cut in half.
Hence the Executive Summary explains:
Where energy savings are “taken back” in the achievement of health benefits, poverty alleviation, or improving productivity, the rebound effect can be viewed as having a net positive outcome, amplifying the benefits of the energy efficiency intervention.In short, the IEA report finds that the rebound effect can often help make energy efficiency investments vastly more cost-effective, which in turn justifies society making far deeper efficiency investments. So it is astonishingly disingenuous for the NY Times to cite that report to suggest that the IEA believes the rebound effect fatally undermines the case for energy efficiency policies.
The Vast Benefits of Energy Efficiency: New York Times Op-Ed Confuses the Facts
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