Bikash

yes, there is plenty of evidence. The latest paper on the rebound in household sector can be found here:  http://www.sciencedirect.com/science/article/pii/S0140988315002492

I also recommend the work by Steve Sorrell on behalf of the UK Energy Research Centre - he reviewed 500 or so studies and provides estimates for all sectors.

Overall, the evidence suggests that rebound effects reduce the expected energy savings somewhat but that there is no evidence for backfire i.e. higher energy consumption resulting from energy efficiency. Rebound effects also have many positive impacts - increased comfort for example with associated health benefits.

Jan

In addition, most program evaluations identify rebound effect is largely attributed to those cases when the equipment replaced through a program, such as a low income program was broken. Therefore, the rebound effect is due to the fact that now customers are able to heat or cool their homes- which is the primary objective of any energy efficiency program. Moreover, for those cases in which the rebound is not tied to replacing broken equipment, but rather behavioral changes, generally the rebound effect is minimal- at 1 to 2 percent at most- which is consistent with other types of behavioral effects. Therefore, rebound effect, while important, is not viewed as a large inhibitor to energy efficiency programs, but rather a minor effect that does not negate the positive benefits of ensuring the all customers live in safe and comfortable homes.

Jan already provided you very good references on rebound effect.

Indeed 'the rebound effect is overplayed' as also K. Gillingham and colleagues shown in a Nature paper from 2 yrs ago. Certainly is below level of savings and no way of backfire in a decently developed economy (it has been true in the industrialisation era when Jevson observed it, but according to vary research, nowadays it is not generally valid)..

a nice theoretical development on rebound effect, causes&types is provided by the same Gillingham, Rapson and Wagner in the 2014 paper from here: http://www.econ.ucdavis.edu/faculty/dsrapson/Rebound_Effect_GRW.pdf

As Jan said, for a good energy planning rebound effect should be considered and welfare increase should be taken as benefit rather than negatively. And the rebound has to be proven as a causal effect of a given energy efficiency policy or measure.

In this respect, I would like to cite from the paper at the above indicated link what is a common misconception on rebound effect: 'Energy demand can increase for a whole host of reasons, with economic growth and improved energy technology chief among them. But correlation is not causation, and causation must be established before anything can be labelled “rebound.”

Bogdan

I would like to add, that the problem, covered behind this question is:

What is the physical dimension of economic systems?

This is a question which is normally not on the table. But think about this: If you measure economic systems in a monetary unit - and that isn't a physically defined unit. Monetary "valuation" is and will ever be only of relative size. It says something of a relative value to a total number of value.

And if you now start looking at a physical input into the system ... you deal in fact with apples and peaches in one basket.

The question therefore should be: What is the real world dimension of the GDP - and in which dimension can and should it be measured?

That is the question to be answered first.

Bikash, I think that the previous responses answer your question accurately.  We refer to numerous studies in the literature in my most recent paper.  Our measurements in a real world setting show that EE did actually reduce energy use.  Energy use has also declined across the UK since around 2005.  Energy prices fluctuate wildly and I think that rather than focus on monetary savings due to EE it is better to focus on the overall carbon impacts of differing lifestyles - for eample the amount of air travel or high mileage car use.  These are much more significant than relatively minor changes to domestic EE.  Focus on EE and "rebound" or "backfire" is in my view not particularly helpful.  In my view the key issue is the degree that our energy related technologies overall become less carbon intensive within a similar apparent consumption envelope.  And I agree that GDP itself is a deeply flawed measure.

Bikash, I think that the previous responses answer your question accurately.  We refer to numerous studies in the literature in my most recent paper.  Our measurements in a real world setting show that EE did actually reduce energy use.  Energy use has also declined across the UK since around 2005.  Energy prices fluctuate wildly and I think that rather than focus on monetary savings due to EE it is better to focus on the overall carbon impacts of differing lifestyles - for eample the amount of air travel or high mileage car use.  These are much more significant than relatively minor changes to domestic EE.  Focus on EE and "rebound" or "backfire" is in my view not particularly helpful.  In my view the key issue is the degree that our energy related technologies overall become less carbon intensive within a similar apparent consumption envelope.  And I agree that GDP itself is a deeply flawed measure.

Thank you all for your insightful responses. Thanks Jan and Bogdan for sharing useful paper on theory and evidence. It appears that rebound effect, while important in energy planning, is not a serious problem considering its other positive welfare impacts.

The central issue that comes immediately to my mind is the implications of different methods/practice of measuring energy efficiency- the discrepancy between the engineering concept of energy efficiency based on the thermodynamic definition and the energy intensity commonly used as rough surrogate for energy efficiency. I agree with Olaf and Phil that GDP based energy intensity is a flaw measure.

But then which alternative efficiency indicators are useful and can be practically measured at what level such as primary energy delivered to an end user after adjusting for the energy lost in the generation, transmission, and distribution or site energy without such adjustment is to be used although using expenditures may be preferable from economic perspective.  And finally energy efficient is to be judged with respect to what – relative efficiency measures.  

Sorry for posing these issues due to my ignorance on measurement practice. I will read with great interest your papers for this.

Sincere regards  

In principle source energy (or primary energy) reflects better the energy consumption of a building as well as the related CO2 emissions. This is the way both EU and US define net and nearly zero energy buildings.

However, only final energy (site energy) can be measured while for primary PEF are needed (e.g. In case of electricity and heat delivered to the site from an external plant). But site energy doesn't match CO2 emissions in this care is measurement is not associated with proper equivalent factors for estimating it. 

So both ways are good but both needs consistent methodology. 

As indicators, you may use sectorial and usage tailored indicators such as energy consumption per m2 or per inch ( e.g. For buildings or for TVs) or per passenger-km (passenger transport) etc etc. One may say that energy sufficiency should be targeted and in this case the energy consumption per building or per equipment or per transport mean has to be measured.

there is a wide literature on this and 

Otherwise I fully agree that energy intensity is an arguable indicator and the reference to GDP is not the best.

To finished my previous answer: have a look to Odyssee-Mure EU project; they have sectorial and aggregate en eff indicators and a great database. 

There is one important question on the table as well:

What is the macroeconomic effect of higher energy efficiency? I would say that this is a necessary question.

And for a valid answer one has to differ between a real higher efficiency (measured in the amount of energy to produce a given good) and a monetary higher efficienzcy (measured in the price of getting the energy necessary to produce a given good).

The real higher efficiency will therefore have a macroeconomic effect as well - there is less doing in total than before. (measured in total amount of energy to produce any kind of goods)

And since a higher efficiency will sooner or later lead to lower prices of any given good - you will see that lowering of the total macroeconomy as well in the monetary accounted GDP - or in an increas of the inflation rate.