Analyzing Rebound Effects

  • Ronald Schettkat


Improvements in resource efficiency1 are important for sustainable development but only if second round effects, i.e. economic responses to higher resource productivity – so called rebound effects – are not compensating or even overcompensating the potential savings of resources thus made possible. Are efficiency improvements in the use of natural resources the key for a sustainable development, are they the solution to environmental problems, or will rebound effects compensate or even overcompensate potential savings, will they fire back? The attractiveness of efficiency improvements, of technological solutions to environmental problems is obvious since they allow continuing with “business as usual” avoiding other measures which may be perceived as welfare reductions. But if rebound effects are very high, efficiency strategies cannot contribute substantially to sustainable development but may – as some authors argue – be the cause of environmental problems rather than the solution.


Final Service Price Elasticity Rebound Effect Efficiency Gain Fuel Efficiency 
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Copyright information

© Physica-Verlag HD 2011

Authors and Affiliations

  • Ronald Schettkat
    • 1
  1. 1.Schumpeter School of Business and EconomicsUniversity of WuppertalWuppertalGermany

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