In its broadest sense the rebound effect occurs when some pro-environmental activity results, directly or indirectly, in some environmental harm which partly or wholly cancels out the initial environmental benefit. For example, by installing a more efficient boiler, you will reduce your carbon emissions and heating costs, but you will spend the money you save on something else and that “something else” will have some associated emissions. Even if you save the money and put it in the bank, the bank will lend it to someone else who will spend it!
This new Ecometrica paper explains the rebound effect in more detail, and discusses how it can be minimised.
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Find out how you can minimise the rebound effect.