UK study finds fifth of car fuel-efficiency savings eroded by increased driving; long-term rebound effect
Around a fifth of the energy-saving benefits of fuel-efficient cars are eroded because people end up driving them more, according to a study into British motoring habits over the last 40 years.
Using data from 1970 to 2011, energy experts at the University of Sussex found a long-term rebound effect among British car-drivers of around 20%. Published in an open access paper in the February issue of the journal Energy Economics, this is the first estimation of this rebound effect—a term used to describe the increased consumption of cheaper energy services—for car travel in Great Britain.
Nearly all previous studies have focused on US motorists and so only provide limited insights for British policy makers due to the differences in population densities and car use between the two countries.
For the study, the Sussex team used aggregate time series data on transport activity, fuel consumption and other relevant variables over the period and estimated the direct rebound effect from the elasticity of both vehicle and passenger kilometers with respect to:
- vehicle fuel efficiency (km/MJ);
- the fuel cost of driving (£/km); and
- road fuel prices (£/MJ)
Taking changes in fuel efficiency as the explanatory variable, they found little evidence of a long-run direct rebound effect in Great Britain over this period. However, taking changes in either the fuel cost of driving or fuel prices as the explanatory variable, they estimated a direct rebound effect in the range 9% to 36% with a mean of ~ 19%.
This estimate is consistent with the results of US studies and suggests that around one fifth of the potential fuel savings from improved car fuel efficiency may have been eroded through increased driving, they concluded.
Improvements in fuel efficiency should lead to reductions in fuel consumption. But since improved fuel efficiency makes driving cheaper, some of the potential fuel savings are ‘taken back’ through increased driving. We call this the rebound effect and it is well-documented in other sectors. For instance, we know that insulation of housing encourages people to enjoy warmer homes, rather than taking all the benefits in the form of lower bills.
Until now, we didn’t know the size of this effect for British motoring. We found evidence of a significant, long-term rebound and expect our results to be of interest for public policy.—Dr. Lee Stapleton, Research Fellow in the University’s Centre on Innovation and Energy Demand
Part of the reason that a reliable calculation has proven difficult thus far is due to disagreements on the best way to measure the rebound effect.
In this study the researchers found that rebound estimates could be obtained by measuring the combined response to both improvements in fuel efficiency and reductions in fuel prices—since both make driving cheaper. But ideally, only the first of these would be used.
In an attempt to make their estimate as accurate as possible, the Sussex researchers tested more than a hundred different models, each focusing on different variables.
The Sussex researchers are now taking a similar approach to estimating rebound effects in GB freight transport.
Lee Stapleton, Steve Sorrell, Tim Schwanen (2016) “Estimating direct rebound effects for personal automotive travel in Great Britain,” Energy Economics, Volume 54, Pages 313-325 doi: 10.1016/j.eneco.2015.12.012