Archive for September, 2010

By: John K. Norris, Contributing Writer to MyEnergySolution.com

Recently, Michael Shellenberger, President of the Breakthrough Institute, posted an article by a leading energy economist, Harry Saunders – one of the authors of a recent paper in the Journal of Physics, explaining why energy efficiency does not decrease energy consumption. In his article, he examines specifically the effects of energy efficient lighting:

“Many have come to believe that new, highly-efficient, solid-state lighting — generally LED technology, like that used on the displays of stereo consoles, microwaves, and digital clocks — will result in reduced energy consumption. We find the opposite is true, concluding ‘that there is a massive potential for growth in the consumption of light if new lighting technologies are developed with higher luminous efficacies and lower cost of light.’

The good news is that increased light consumption has historically been tied to higher productivity and quality of life. The bad news is that energy efficient lighting should not be relied upon as means of reducing aggregate energy consumption, and therefore emissions…..

‘The consequence is not a simple ‘engineering’ decrease in energy consumption with consumption of light fixed, but rather an increase in human productivity and quality of life due to an increase in consumption of light.” This phenomenon has come to be known as the energy ‘rebound’ effect.’”

The rebound effect, also referred to as the “Snackwell effect” after the cookies, is basically the idea that because something now costs you less, you are inclined to consume more of it. Accordingly, since energy efficient lighting costs consumers less as a part of their electric bills, consumers are more likely to use more lighting than if it were expensive.

Saunders breaks the rebound effect down into direct-use and indirect-use rebounds. Direct-use rebounds would be exactly what I mentioned in the above paragraph…your home lighting costs less so you consume more of it. Saunders feels that indirect-use rebounds pose the largest impact to society.  The idea of indirect-use rebounds is that the cost of energy is incorporated into every product and service in the economy.  Since firms benefit from lower energy costs on the input side, they are not only inclined to take advantage of this reduction by not only increasing the output of their products and services but also trying to move more of their products and services to other applications. While this increase in output maybe economically beneficial to society, any correlative energy reduction through the use of energy efficient technologies is eliminated through the increase in production.

Not everyone agrees that Saunders is correct. Evan Mills, a scientist at Lawrence Berkeley National Laboratory, stated:

“More is not always better. For rich and poor alike, the sky (i.e., a burning sun in every living room) is not the limit for lighting demand. Illuminating engineering societies around the world have actually been reducing their lighting-level recommendations for many years running, as overzealous guidelines have been seen to create excessive glare and other problems.”

Basically, what Mills is saying is that just because something is cheaper does not always correlate to increased usage and that the rebound effect does not take into account individuals who want to absorb the savings they receive as a result of energy efficient products as some sort of financial cushion. Same for firms who instead of increasing output, take in higher profits.

In addition, Mills is also stating that as a society we are re-thinking what our demand requirements should be. For example, many commercial buildings are lit for 100 foot candles per square foot when 30 foot candles per square foot are sufficient. In this instance, the savings in energy efficient technologies is being preserved by a simple re-consideration of what our demand requirements really should be and implement that across the economy.

Saunders’ argument, however, is not that energy efficient technologies are a fool’s gold, rather they offer tremendous opportunity for increased output and economic growth. His real point seems to be that we need to be clear about what energy efficient technologies really provide to society:

“…greater energy efficiency may be a net positive in increasing economic productivity and growth but should not be relied upon as a way to reduce energy consumption and thus greenhouse gas emissions….efficient technologies such as solid-state lighting may be central to uplifting human dignity and improving quality of life through much of the world….in this way energy efficiency is no different from other strategies for increasing economic growth.

None of this is to mean that we should not pursue energy efficient technologies. However, because the implementation of these technologies across the economy is relatively recent and the trickle down effect through the economy is on-going, it is unclear what the ultimate effects will be in total energy consumption.

John Keller Norris is the founder of Del Sol Capital Partners, LLC and is located in La Jolla, CA. Mr. Norris has been actively involved in the bidding, procurement and development of office space for the U.S. Government in the western U.S. Included in that process is the research, design and implementation of cost-effective energy management systems for federal government leasehold facilities. Mr. Norris graduated from the Ohio State University with a B.S. in Finance and Accounting and received an M.B.A. from San Diego State University.