Revised 30 August 2021

The rebound effect occurs when greater efficiency in the use of resources results in greater consumption of that resource due to an increasing demand (Jevons, 1865). Jevon’s example is the increase in the efficiency of the steam engine in the 1800s which resulted in a greater demand for more steam engines. Although each new improved steam engine used less coal, the combination of more steam engines using less coal resulted in a greater consumption of coal. Another example of the rebound effect is the replacing electrical bar heating of homes with a heat pump. Owners often choose to adopt a higher standard of comfort within their previous budget for heating by heating their entire home instead of only the room they occupy and raising the temperature of the rooms to a level where they can comfortably remove top layers of insulating clothing. The potential savings in energy are not necessarily fully realised even though the efficiency of a heat pump to provide home heating is much greater than that of bar heaters. If the efficiency of a car engine is improved and uses less fuel per kilometre, then an owner is able to drive longer distances within the same budget or use the savings in fossil fuels to purchase additional goods and services which involves further consumption of resources. The potential to reduce consumption of fossil fuels is not necessarily fully realised because any purchase of additional goods and services always involves consumption of additional energy.