Unilateral national climate policies are not strict enough to control carbon rebound — a side effect of some energy-conservation strategies that undercuts net carbon savings. I suggest that a global agreement on variable carbon pricing at the forthcoming climate summit in Paris would reap considerable rebound-related benefits.
Economy-wide studies indicate that overall carbon rebound is at least 50%, depending on the country (J. Dimitropoulos Energy Policy 35, 6354–6363; 2007). Despite this, the effects of rebound have been largely ignored by the Intergovernmental Panel on Climate Change and at United Nations climate meetings.
Technical standards do not control rebound effectively: they cover only a small subset of products. For example, when the European Union began phasing out incandescent light bulbs in 2009, light-emitting diodes became so widespread that any energy savings were reduced.
The most effective way to discourage rebound is through carbon pricing, a policy that underpins all potential energy-savings decisions. Any rebound tendency would elicit a higher carbon price under a cap-and-trade permit scheme. A carbon tax would require frequent adjustment to achieve the same outcome. This would be difficult politically, especially in the form of nationally distinct taxes.
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van den Bergh, J. Pricing would limit carbon rebound. Nature 526, 195 (2015). https://doi.org/10.1038/526195a
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DOI: https://doi.org/10.1038/526195a