The model takes into account a 'rebound effect' on renewables, noting as a Key Dynamic that subsidizing renewables lowers energy prices, which increases energy demand relative to status quo (you can see this with the Final Energy Consumption chart), and this somewhat offsets the benefits of more renewables. This makes sense.
However, why does this rebound effect not apply to increased energy efficiency? There is a well known paradox know as Jevons Paradox, which occurs when increased energy efficiency causes more consumption of that resource due to increasing demand. This was discovered in the 1800s when increased efficiency in coal use led to increased coal consumption. Why does the model assume this effect only applies to subsidizing renewables and not increasing energy efficiency? While subsidizing renewables slightly rises final Energy Demand in EN-ROADS, Increasing efficiency substantially lowers demand.
Also, I noticed that the only thing that changes the GDP and GWP graphs are the Population and Economic Growth sliders. However, it seems many other sliders would have an effect on GDP, including energy efficiency and renewables. I would expect GDP to rise as improvements are made in efficiency and renewables, which would play into the rebound effect, since increased GDP leads to more energy demand.
Any insight would be appreciated. Thanks!
Thanks, that does help.
I just assumed the rebound effect was stronger for renewables because it is listed as Key Dynamic in Help, whereas its not mentioned in the Help section for efficiency, but I guess that may not necessarily be true.
For energy efficiency there are two factors that impact energy consumption and they have opposing effects.
1. Energy efficiency leads to less need for energy to provide the same service. So this makes energy consumption go down.
2. Energy efficiency leads to less money needing to be spent on energy to provide the same service. So this makes energy consumption go up.
The impact of the effect of dynamic 1 is greater than the impact of dynamic 2, so therefore when you look at total energy consumption in a scenario with lots of energy efficiency, you see energy consumption going down. And because of the multiple dynamics at play it is hard to say that the rebound effect is stronger on renewables.
Hope that clarifies!
Ok, it's interesting that the rebound effect is strong when subsidizing renewables but not for energy efficiency, do you know what that is?
The Jevons Paradox is accounted for with regards to energy efficiency, it's just that it isn't strong enough to entirely offset the gains that come from the energy efficiency improvements themselves, which lower energy demand.
For example, I might drive a new high fuel efficiency car more than a an old gas guzzler because I don't spend so much on gas. But if that car is twice as efficient as my previous old car, I'm not likely to double my driving, just because I'm not spending so much on gas, so on the whole would still burn less fuel.
And yeah, feedbacks to GDP are not captured. In many cases the range of uncertainties in what the impact would be is very difficult to estimate and also just uncertain even to the degree of whether a specific action would help or hurt economic growth.